No let-up in food price hike despite massive imports

KARACHI: In the first half of the current fiscal year, higher food imports increased the gross import bill by 52 per cent to $3.9 billion (1HFY21).

Imports of wheat and sugar to stabilise skyrocketing food prices played a major role in fueling the total import bill during FY21. However, the rise in imports of wheat, sugar and palm oil did not bring about any price declines for the masses.

Under the government’s strategy to curtail imports, the total food import bill shrank by 4.32pc to $5.423bn in FY20. In FY20, there were no wheat imports. The number of imports of sugar during the same period was small.

The nation imported 2,489 million tonnes of wheat at a cost of $661 million, according to the Pakistan Bureau of Statistics (PBS) estimates. The average wheat price per tonne stood at $265.

However, by cutting flour rates by Rs7 per kg in the third week of October, millers only offered one-time relief to consumers. The price of flour No.2.5 decreased to Rs52 when the price of fine and super fine flour was Rs64. Despite periodic wheat imports, the millers began driving up prices again along with the introduction of new crops and daily deliveries from the provincial food departments. Compared to Rs330 and Rs680, five and 10 kg bags from branded flour mills now cost Rs360 and Rs700-720 respectively.

Pulse imports increased by 13pc to 568,206 tonnes in quantity and 17pc to $287m in volume. The average price of pulses per tonne increased to $506 from $487. In the wholesale markets, pulse prices have recently risen by Rs20 per kg. Now the gramme pulse, moong, masoor, and mash wholesale prices are pegged at Rs140, Rs240, Rs130 and Rs240 per lb, respectively.

In 1HFY21, the import bill of palm oil stood at $1.111 billion, up by 32pc from IHFY20, while import volume rose by 7.49pc to 1.629m tonnes. The average price per tonne swelled from $555 to $682, resulting in a rise in the price of ghee and cooking oil by Rs40-50 per liter/kg.

Soybean oil imports also increased by 23pc to 72,756 tonnes in quantity and 18pc to $48m in volume, while the average price per tonne dropped from $668 to $663.

Karachi Retail Grocers Group (KRGG) General Secretary Farid Qureishi said, “Ghee and cooking oil prices are on fire.” For example, he said that on January 14, a five-litre pack of branded cooking oil was priced at Rs1,480 compared to Monday’s new price of Rs1,625.

Compared to Rs200 on Jan 14, the price of average quality oil is now pegged at Rs250 per litre, whereas the price of high quality oil is now Rs300 compared to Rs250.

In the last week of December, the price of sugar rose to Rs90-95 per kg from Rs85 per kg, following a continuous rise in wholesale prices.

The spike in high-speed diesel prices from Rs2.95 a litre to Rs113.19 further raised the cost of transport. However, in view of the increasing rupee value against the dollar in the last few months, the rate of manufactured products has certainly fallen.