KARACHI, Jan 15: One of the leading ghee and cooking oil producers has increased rates of its brands by Rs9.40 and Rs11.40 per kg, respectively. This is the seventh increase since September 2006.

A one kg pouch of ghee and cooking oil will now cost Rs123 and Rs125 as against Rs112 and Rs111.

Besides, the price of 16-kg ghee tin has been raised to Rs1,730 from Rs1,700 last week. In January 2007 it was priced at Rs1,030.

Makers of Dalda has increased the rate of five-litre cooking oil tin to Rs625 from Rs568, while 2.5 litre tin will now cost Rs320 as against Rs292. The five and 2.5 kg ghee tins will be available at Rs615 and Rs315 as against Rs568 and Rs292, respectively. In September 2006 the five-kg ghee tin was available at Rs395.

The new rates will be effective from next week as the production with new price tag will start from Wednesday, an official in Dalda Foods, who asked not to be named, told Dawn.

Other branded packers, like past practice, will also increase prices of their brands by identical amount.

This can be a severe jolt for the consumers who are already forced to procure wheat flour and rice at record high rates.

Describing the price hike result of rising international palm olein rates, the Dalda official said that this price hike was actually based on the palm olein price which peaked four weeks back. “The prices of these brands will remain under pressure in the current year,” he added.

He said that palm olein rate surged to $1,160 per ton from $1,070 last week while in local market its rate increased to Rs3,560 per maund (37.23 kg) as compared with Rs3,480 last week. The rate of canola oil in local market rose to Rs4,000 as against Rs3,650 per maund last week while soyabean oil rate tagged at Rs4,000 as against Rs3,800 per maund.

In world market, soyabean oil is being quoted at $1,217 per ton as against $1,190 per ton last week. The C&F price of imported RBD palm olein was $465 in July 2006.

Besides the impact of rising palm olein rates, local prices had been increased owing to various factors like losing strength of Pak rupee against dollar which have made imports costlier.

He said that transporters were now demanding Rs85,000 for carrying a load of 30 tons from Karachi to Lahore as against Rs60,000 before torching of many vehicles after the assassination of Benazir Bhutto on December 27.

Similarly the freight from Karachi to Islamabad has increased to Rs100,000 from Rs75,000 as transporters say that they are still feared about any uncertain situation. Besides, they return empty handed due to thin availability of cargo after slowdown in exports.

He said that the local producers of ghee and cooking oil in the Punjab and the Frontier were still confronting the power and gas crisis that had reduced their manufacturing capacity.

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 said 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 10 per cent duty cut on palm oil imports, which had been effective from January 1, 2008 under the Free Trade Agreement (FTA) reached between Pakistan and Malaysia, would not benefit consumers in a big way and would result in just Rs1.05 per kg decline in ghee and cooking oil prices when shipments would arrive in February. As the palm olein rates have been on the rise, it has already resulted in making a zero impact.