KARACHI, Feb 11: The ghee and cooking oil manufacturers have raised prices of their products despite a government warning against price hike. The prices of 16kg ghee and cooking oil tins continue to surge. The cooking oil tin is now priced at Rs1,700 as compared to Rs1,660, while the ghee pack sells at Rs1,500 compared to Rs1,420 three days back.

However, the branded ghee packers of 2.5 to 5 kg/litre of ghee and cooking oil have not come out with any increase.

Chairman Pakistan Vanaspati Manufacturers Association (PVMA) Abdul Majeed Haji Mohammad said the palm oil prices had surged by $50-60 per ton (C&F) Karachi in the last 15 days. Currently, the rate of palm oil is $660 per ton.

He said that the palm oil demand has surged in Malaysia and Indonesia after massive buying by China and Argentina where drought had affected indigenous soyabean production.

He added that prices of 16 kg ghee and cooking oil tins fluctuate daily in the local market on the palm oil rates prevailing in the Malaysian and Indonesia markets.

Majeed said that there had been 10 per cent decline in production of palm oil in Malaysia during January 2009 followed by some shortages. “This is a temporary phase and situation will improve in months to come,” he added.

However, with regard to cooking oil prices, consumers have to wait for the decline as seven ships carrying sunflower seeds will be arriving during Feb 15 to April 15, while some more ships are loading canola seeds from Canada. Besides, the local crops of canola and sunflower would be ready in March.

“I think prices of cooking oil are likely to remain stable in coming months,” he added.

When informed that the government intends to take action against the manufacturers for not reducing the price, he claimed that that the ghee and cooking oil prices in the country were still intact and are in line with the rates decided with the Federal Industries Minister Manzoor Watoo last month.

Meanwhile, a branded ghee and cooking oil producer said that in case the palm oil price continues to rise for the next 10 days then his company and other packers may come out with some increase in prices.

Leading packers had reduced the rate of ghee and cooking oil in October to December 2008. For example, Dalda five-kg ghee tin now priced at Rs640 as compared to Rs775 in September. Similarly, Habib five-litre tin is now available at Rs685 as compared to Rs785.

Palm oil rates had peaked to $1,200 per ton in July 2008 but dipped to $795 in September and $670 in October 2008. The local palm oil rates had hit peak of Rs4,200 in July last year, declining to Rs3,600 in September and to Rs2,900 in October 2008.