Wednesday, September 02, 2009

KARACHI - Out of 112 commodities in the Consumer Price Index (CPI) food group, the prices of 74 items increased from 10 to 93 per cent, 17 items recorded 0-10 per cent increase while 18 commodities showed decline in the value in July 2009. The prices of most of the food items had started surging two to three weeks ahead of the holy month of Ramazan. One food item, coffee, witnessed 100 percent price change (YoY) in July this year. In terms of weighted contribution, seven out of top ten commodities were from CPI food group during July 2009, i.e., fresh milk, wheat flour, meat, sugar, vegetables, readymade food and tomatoes.

State Bank of Pakistan s Inflation Monitor for July 2009 points out that the weighted contribution of these seven food commodities in the overall CPI inflation was 37.6 percent with 20.4 percent weight. Within food group, just five items, i.e., wheat flour, fresh milk, meat, sugar and vegetables contributed 73.8 percent with 45.3 percent weight to YoY food inflation. CPI food inflation month-on-month (MoM) basis showed significant increase during July 2009 compared to the previous month. CPI food inflation (MoM) was 3.0pc during the month under review compared to 2.8pc during July 2008 and 1.0pc during the previous month. Detailed item-wise analysis of CPI food basket on MoM basis showed that 11 items including onion, pulse mash, eggs, potatoes, tomatoes, garlic, etc. showed double digit price change during July 2009, whereas prices of 16 items including arvi , ghee, mustard oil, chilies green, red chillies, etc. declined. Within food group, further segregation (of 40 composite food items in the CPI basket) can be made on the basis of perishable and non-perishable commodities.

Inflation (YoY) in the perishable group witnessed increase and was recorded at 26.6 percent during July 2009 compared to 22.9 percent in July 2008 and 22.8 percent during the preceding month. Prices of perishable commodities are often volatile and this is reflected in the inflation (MoM) which reached 14.7 percent during July 2009 compared to 11.3 percent in the same month last year and 3.6 percent during June 2009. Inflation (YoY) in non-perishable group declined during the month under review and reached 8.6 percent compared to 35.4 percent during the corresponding month last year and 9.0 percent in June 2009. On MoM basis inflation in non-perishable group was 1.5pc during July 2009 compared to 1.8 percent in July 2008 and 0.7pc during June 2009.Overview The current fiscal year commenced with ease in headline CPI inflation (YoY) compared to the same month of previous fiscal year. Consumer price inflation year-on-year basis was 11.2 percent during July 2009 as against 24.3 percent in July 2008 and 13.1 percent in the previous month. Significant decline was witnessed in both food and non-food group s inflation (YoY) during July 2009 as compared to the same month last year. Contrary to YoY inflation, CPI inflation (MoM) increased during July 2009 and was recorded at 1.5 percent compared to 1.0 percent in June 2009. CPI food group showed significant increase in inflation (MoM) during July 2009, whereas non-food group showed a decline of 0.7 percentage points. Ease in inflationary pressures can also be seen in both measures of core inflation, i.e., non-food non-energy (NFNE) and 20% trimmed mean during July 2009. Both NFNE and 20% trimmed mean showed decline during July 2009 as compared to the same month last year and the previous month.

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Saturday, August 22, 2009

The Trading Corporation of Pakistan (TCP) has amended its sugar import tender to 'facilitate' only one Dubai-based party, which was also favourite of the former TCP Chairman Saeed Khan, sources in Commerce Ministry told Business Recorder. On August 13, TCP had invited bids from the pre-qualified foreign suppliers for 75,000 tons white sugar, in bags (in break bulk), from world-wide sources. Interested TCP pre-qualified foreign sugar suppliers/exporters who can supply the commodity from anywhere in the world had been asked to submit their sealed enrolls to the TCP. However, TCP on August 20, 2009, made the following amendments in tender No Imp/Sugar/9-10/09 dated 13th August 2009 to be opened on 29th August 2009. Quantity: clause No 3 (b): may now be read as follows "bid shall be made for a minimum quantity of 50,000 MT" Performance Guarantee; clause No 12 (b): may now be read as under: "The performance guarantee shall be furnished within five (5) calendar days of the date of acceptance of bid by the buyer."

Shipment; (clause No 15 (a): may now be read as follows: "first shipment of at least 12,500 MT within two (2) weeks from the date of opening of L/C and subsequent shipments of same quantity after every one week." Pre Shipment Inspection; in clause no.16 (a) the last word "buyer" is substituted with the word "seller". Age of Vessel; in the 4th line the words "twenty five (25)" are replaced with the words "thirty (30)" and after the words.....over 15 years, insert the words "any and all". In the last line, the following is also added: "In case the vessel is above 25 years of age, then a penalty of $1 per year PMT will be borne by the supplier in addition to average premium as per Lloyds of London Scale." Terms of shipment on C&F free out basis (for break bulk): the words....two thousand five hundred (2500) MT are substituted with two thousand (2000) MT and the word directs after the word cranes/to be read as derricks.

In the last line, the following wording is added: "and seller shall be responsibility for the same". In the second line after word "Bin Qasim/" the word "Gwadar port" is deleted. In second line the word three is also deleted. The last line to be now read as "....of the entire loaded cargo at Karachi Port". The words Gwadar Port are deleted wherever it appears in this tender document. Annexure-I: In clause (3) Price after the word "Karachi, insert the words "Port or Port Bin Qasim". When the Manager Imports, TCP was approached for the rationale behind the amendments in the tender documents, he replied that all the changes were done at the top level. He further stated that TCP is also allowing unqualified suppliers/ exporters to import sugar. Analysts, however, are of the view that import of 75,000 tons of sugar is not needed at this stage as it will reach Karachi after Ramazan because of the formalities. TCP's stocks are about 0.3 million and the next crushing season will start probably in October or early November after which time there will be no need for import.

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Friday July 10, 2009

ISLAMABAD: The CPI inflation for June-July 2008-09 surged by 20.77 percent as compared to the same period of last year, reveals official figures of Federal Bureau of Statistics, released here on Thursday. Official monthly figures on inflation, however, showed substantial decline of 13.13 percent in the CPI in June 2008-09 over 21.35 percent for the same month last year.

The SPI and WPI also decreased to 10.80 percent and 4.15 percent respectively in June over 30.02 percent and 30.62 percent for the same month of last year. With this decline, according to the FBS, food inflation has come down to 10.50 percent in June. The inflation target is set in single digit for the next fiscal year.

Further analysis of the data showed that increase in WPI and SPI was 18.10 percent and 23.41 percent respectively during July-June 2008-09 as compared to 16.41 percent and 16.81 percent for the same period last year. The Consumer Price Index in June 2009 increased by 0.99 percent over previous month and 13.13 percent over June last year.

With this increase in CPI, the inflation in food items was noted 10.50 percent, non-perishable food items 8.99 percent, perishable food items 22.96 percent, apparel, textile and footwear, 10.93 percent, and 18.60 per cent in house rent in June 2009.

The CPI for the period under review on fuel and lighting was noted 23.78 percent, household, furniture and equipment, etc, 10.75 percent, transport and communication 5.01 percent, recreation and entertainment 4.53 percent, education 19.18 percent, cleansing, laundry and personal appearance 14.26 percent and medicare 6.26 percent.

The main commodities which showed an increase in their prices during June, 2009 over May are tomatoes (71.40 percent), potatoes (38.16 percent), gur (8,32 percent), pulse mash (3.38 percent), milk fresh (3.22 percent), pulse moong (3.14 percent), milk products (3.09 percent), cooking oil (2.81 percent), vegetable ghee (268 percent), vegetable (2.32 percent), sugar (0.96 8 percent), etc. Wholesale price index surged by 2.40 percent in June 2009 over May and food items 0.54 percent.

(BRecorder)

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Saturday July 04, 2009

KARACHI: Pre-Ramazan rise in prices of essential commodities is expected to take place much earlier than usual because of the gigantic surge in prices of petroleum products. Prices of fruits and vegetables have already surged in the range of Rs 10 to 15 per kg in the wholesale market, according to fruit and vegetable dealers in new Sabzi Mandi.

Apprehensive traders said that major items will be pulses and wheat flour whose soaring rates would in turn increase the cost of living, particularly for the poor, much before the advent of Ramazan because of the government's 'stiff' petroleum policy. "Demand of essential items goes on increasing before Ramazan, particularly of pulses, wheat flour, and related by-products," traders said.

Inland transportation cost has immediately skyrocketed with petroleum price increase due to which sugar rate has so far mounted to Rs 4320 per 100 kg sack, from Rs 4260 in the mass market, they added. They said that 50 paisa per kg of sugar has increased immediately which is likely to reach Re 1 in the next few days in the wholesale market. Retail price of sugar is Rs 45 per kg.

Similarly, wheat flour price has posted Rs 30 increase per 100 kg bag until now, which is available at Rs 2250, according to traders, while millers say that increase of Re 1 per kg in wheat flour price has so far taken place in some parts of the city.

The Chairman of Pakistan Flour Mills Association (PFMA), Johar Ali Qandhari, said that increase of Rs 30 to Rs 40 per 100 kg sack of wheat grain has occurred immediately because of petroleum prices surge. To mills now wheat grain is available at Rs 2425 per 100 kg.

Wheat shortage has also occurred because of disagreement between millers and transporters over new cartage rates. However, largely they have now been agreed upon, he said. He pointed out that electricity crisis is another prominent issue which is likely to give rise to the cost of wheat flour production when the government removes subsidy. There is also a fear of a dangerous surge in flour prices.

Qandhari urged the government to set up a permanent price fixation system to protect the consumers' rights in such chaotic situation, and said that everyone would try to multiply profit on the pretext of oil price hike. Wheat flour in retail market is being sold as [fine quality] at Rs 32 per kg, [2.5 no flour] at Rs 30 per kg, [flour chaki] at Rs 32 per kg.

Impact of petroleum prices will come in a week's period, said General Secretary of Karachi Retail Grocers Group, Fareed Qureshi. Sugar price in the wholesale market has immediately mounted by 50 paisa per kg, said chairman of Karachi Wholesalers Grocers Association, Anis Majeed, adding that increase in transportation cost would soon pass on to end-consumers.

Increase of Re 1 per kg in prices of all varieties of pulses is also going to occur shortly, which he termed "the direct and immediate impact" of the recent rise in petroleum prices. He said that the supply of pulses to Karachi would be smooth for the Ramazan to meet the demand.

He condemned the price rise of petroleum products, saying that it would cripple the consumers' purchasing power. Rs 57/litre of petrol is also high for common people, Anis Majeed said. Pulses prices have already surged in July as compared to June this year. Prices of mash washed [I and II] went up to Rs 95 per kg from Rs 77 and Rs 87 per kg from Rs 72 respectively.

Prices of mash peel black mounted to Rs 66 per kg from Rs 57, Kabuli chana white [I and II] to Rs 92 per kg from Rs 84 and Rs 66 from Rs 60 respectively. Price of Mong washed [I and II] to Rs 60 from Rs 53 and Rs 50 from Rs 47 per kg respectively. Prices of moong whole-I increased to Rs 97 per kg from Rs 96 and Mash whole Rs 75 from 73 correspondingly.


(BRecorder)

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Wednesday July 01, 2009

ISLAMABAD: Minister of State for Finance and Economic Affairs Hina Rabbani Khar on Tuesday assured the National Assembly of bringing the inflation down to single digit from the current 14 percent during July. The minister was speaking on a calling attention notice moved by lawmakers in the Lower House of the Parliament expressing concern over the skyrocketing inflation in the country and the government's failure to bring it down.

Rabbani said the government is well aware of inflation and was taking various steps to bring it down. Due to the government strategy, the inflation has been brought down from 25 percent to 14 percent and it would be further bought to single digit in July.

She said the federal government is in constant touch with provincial governments to arrest the upward trend of the prices of the consumer goods. The minister said giving subsidy on petroleum has never been the right policy since Pakistan did not produce petroleum and its related products.

Commenting on the levy of carbon surcharge on petrol, she said it would be helpful in discouraging people from using petroleum and switch to alternate energy resources, ultimately increasing the usage of environment friendly fuel. The minister also mentioned that prices of a number of kitchen items had already reduced including cooking oil, Basmati rice, etc.

About rise of sugar prices, the minister informed the House that the ECC has taken note of rise in the price of sugar. The minister said this year Pakistani farmers have been paid Rs 290 billion for purchase of wheat crop by the government. Replying to a question about non-transfer of impact of oil price reduction by the PIA and Pakistan Railways, she said these two institutions were already in losses. These organisations, she said, are not earning any profit and the government has to give them subsidy.

(BRecorder)

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Tuesday June 30, 2009

ISLAMABAD: The prices of vegetables, fruits and pulses have increased by 20-30 percent after the announcement of the current budget, claimed traders community of local market. Talking to Business Recorder here on Monday traders revealed that prices of essential commodities including vegetables, fruits and pulses have gone up as much as by 20-30 percent.

Traders said that the price of Nido milk has gone up from Rs 360 to Rs 390 per kg. Similarly the prices of Mash Pulse, Moong Pulse, Masoor Pulse and Gram Pulse have gone up by Rs 10 to Rs 15 per kg. Prices of tomato have gone up from Rs 25 to Rs 40 per kg, Prices of onion has witnessed an increase of Rs 10 per kg as prices has gone up from Rs 20 to Rs 30 per kg and prices of lady finger has gone up from Rs 35 to Rs 40 per kg.

On the other hand the prices of fruits have also witnessed an increase of 10 to 20 percent. The prices of mango have gone up to Rs 60 per kg from Rs 45 per kg. Traders opined that ongoing military operation in Malakand division is also considered to be one of the reasons behind the raise in fruits and vegetable prices.

Pakistanis have been grumbling about rising inflation for more than a year but in the past few days the sticker shock has grown much worse. Vegetables and fruits prices have jumped that now it is going out of reach of the poor segment of the society.

The people of the twin cities of Rawalpindi and Islamabad have termed it an artificial shortage by the wholesalers and retailers who are looting the innocent people with both hands some time on the name of short of supply and some time on the electricity and gas loadshedding. Ahmad Ali a resident of the Abpara told this scribe that we were told that due to law and order situation number of check posts has been increased and it is going difficult to meet the purchase orders and due to which some of the items are going short in the market.


(BRecorder)

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