KARACHI, Jan 8: While consumers are already hard-pressed over rising wheat flour prices, they will have to sustain a further pressure on their income at the start of the new year as branded ghee and cooking producers are flexing muscles to make an increase of Rs6-8 per kg next week.

Sources in ghee industry hinted that the branded ghee producers are working on the price increase and planning to announce different rates because of a big difference in palm olein rates used for making ghee and canola and soyabean oil used in cooking oil.

The C&F price of palm olein is now quoted at $1,060-1,070 per ton while in the local market, it is being sold at Rs3,480 per maund (Rs37.234 per kg).

The rate of canola oil in local market is Rs3,650 per maund while soyabean oil rate is tagged at 3,800 per maund.

In the world market, soyabean oil is being quoted at $1,190 per ton. If prices increase this month, it would be the seventh hike since September 2006. The current rate quoted by the producers of ghee is Rs568 per five kg / litre and Rs292 for 2.5 kg per litre on cooking oil. In September 2006, five kg ghee tin was available at Rs395.

The price of 16 kg ghee tin has been fluctuating daily and currently it hovers between Rs 1,650 and 1,700. In January 2007, tin was selling at Rs1,030.

The distributors of branded ghee had earlier alarmed the retailers about a possible price hike. A leading ghee producer who asked not to be named said new prices would be effective by the end of this month.

Chairman, Pakistan Vanaspati Manufacturers Association (PVMA), Shaikh Amjad Rasheed, however, said branded ghee producers would announce new prices in the next eight to 10 days.

He was of the view the producers may increase the rate by Rs8 to 10 per kg. He said the local producers of ghee and cooking oil in the Punjab and NWFP were also confronting with power load-shedding and low pressure of gas. Perturbed over power and gas crises, the manufacturers in the upcountry had shed their manufacturing capacity by 25 per cent.

He said the government was still not ready to address the genuine grievances of the local industry which has been asking for a cut in the import duty on raw material and general sales tax (GST) so that prices at domestic level could come down.

He said the C&F price of imported RBD palm olein was $465 in July 2006. The production cost of vegetable ghee, leaving aside profit margin of the manufacturers, which was Rs57,415 per ton in July 2006, had increased to over Rs105,000 per ton or over Rs105 per kg on Nov 1.

He added that the component of government duties and taxes in the production cost of vegetable ghee/cooking oil in July 2006 was Rs18 per kg, which had now increased to around Rs23.60 per kg.

The PVMA chairman said the 10 per cent cut in duty on palm oil imports, which had been effective from Jan 1 under the Free Trade Agreement (FTA), would not benefit consumers and result in a mere decline of Rs1.05 per kg in ghee and cooking oil when costly palm olein shipments would arrive in February.