KARACHI, March 18: The prices of 16-kg ghee tin have fallen to Rs1,850 in Punjab and NWFP from the highest peak level of Rs2,150 in the first week of March owing to falling prices of palm olien in Malaysia.

In Karachi, the rate is being quoted at Rs1,880 as compared to peak Rs2,100 earlier this month.

The prices of 16-kg ghee tin fluctuate on a daily basis, depending on local rate of palm olien and soybean oil while packers make certain changes in view of their previous shipment price.

However, since September 2006, leading packers have increased the rate by ninth time.

In the last week of February, Dalda oil price had soared to Rs750 for five litres from Rs680. In September 2006, it was available at Rs395.

A leading packer of ghee and cooking oil, who asked not to be named, said companies cannot pass on immediate impact of falling palm olien rates to consumers because “they had bought palm olien at higher rates in previous months.”

“If falling trend in palm olien continues in the next two weeks, the packers may think about reducing the rates,” he said.

He added that the increase in power rates and transportation charges would nullify the impact of falling palm olien rates on local prices, but the company would think about reducing the rate.

Market people said the branded packers had increased rates substantially in the last one-and-a half years and there would hardly be any major relief to consumers unless they come out with a big discount.

They said if packers have booked palm olien at low rates from the second week of March, they should pass on the impact to the end-users in the coming weeks.

Karachi Retail Grocers Group General Secretary Farid Qureishi said, “so far distributors of the branded companies have not hinted at any cut in rates, but these companies have started offering discount schemes on various items.”

Pakistan Vanaspati Manufacturers Association Chairman Abdul Waheed told Dawn from Islamabad on Tuesday that his association would definitely ask packers to cut rates in case the palm olien prices remain stable or unchanged for the next two weeks.

He, however, said he was not optimistic about a further cut in palm olien rates in Malaysia. It would increase after one week because of low production in Malaysia.

He said palm olien rate fell to Rs3,800 per maund (37.23 kg) from Rs4,600 in the first week of March, while in Malaysia the declined to $1,280 per ton from $1,540 peak level in the first week of this month. The C&F price of imported RBD palm olein was $465 in July 2006.

The 16-kg items are widely used by hoteliers, caterers and sweet makers while general consumers depend mainly on 2.5 to five litre/kg packing. However, users of these brands have not yet passed on the impact of falling 16-kg tin prices. A majority of them had increased prices much earlier.

Mr Waheed said 16-kg tin packing holds 40 per cent market share. The market share of one kg pouch, which was five to 10 per cent a year back, has surged to 20 per cent. Pakistan produces 3.2 million tons of ghee and cooking oil per annum in which share of ghee is 70 per cent while the rest is of cooking oil.

He said over 90 per cent shipment of palm olien has been arriving from Malaysia following a 10 per cent duty cut on palm oil imports from Jan 1, 2008, under Free Trade Agreement (FTA) between Pakistan and Malaysia.

However, its impact in the shape of price cut was just Re1 per kg. He added that prior to January this year, 60 per cent of palm olien used to arrive from Indonesia and 40 per cent from Malaysia.

The PVMA chairman said that the association would talk to the new government relating to cut in duties and taxes. However, previous efforts of the PVMA for a cut in duties and taxes had failed as the government was reluctant owing to cut in revenues.