KARACHI: 2019 proved a tough year for the consumers in terms of rising living costs fuelled by record-high food inflation.

With no effective price checking mechanism at provincial and city government levels despite several meetings by Prime Minister Imran Khan on the price stability issue, the market stakeholders this year had set a highest benchmark for various commodities such as wheat flour, vegetables, chicken, pulses, red meat, CNG etc.

Many consumers remembered purchasing tomato at a maximum rate of Rs400 per kg amid demand and supply gap in local crop and imports from Iran.

They also braved to pay up to Rs500 for live chicken meat, followed by green mash price of Rs320 per kg which was Rs180 per kg in January 2019. Capsicum price soared to Rs320 per kg few months back followed by over Rs100 in onion.

‘Prices remained on the higher side mainly because of currency devaluation, which we call imported inflation’

A price comparison from January last year to now revealed an increase in price of moong to Rs240-260, from Rs130-150 per kg; mash to 200-240, from Rs140-180; gram pulse to Rs160, from Rs120 per kg. Sugar now costs Rs75 from Rs65 per kg.

Consumers had witnessed a jump of Rs100 per kg in various tea prices in the last one year while loose milk climbed to Rs110-120 per litre, from Rs94, followed by yogurt to Rs160, from Rs140 per kg.

The most alarming jump was seen in varieties of flour which went up by Rs15-18 per kg from April 2019 onwards. Both federal and provincial governments gave a free hand to millers to jack up prices. A month back, the government woke up to bring down flour prices.

The federal government had started releasing wheat stocks to provincial administrations, including Sindh. Wheat bag price in the open market rose to over Rs4,800 per 100kg, from Rs3,000 in April 2019.

Flour price impact on roti

Karachi Wholesale Grocers Association (KWGA) Chairman Malik Zulfiqar Ali said that Commissioner of Karachi Iftikhar Ali Shallwani in a meeting had decided to set the ex-mill of flour at Rs43 per kg.

As a result, in the city’s retail markets, flour will be sold at Rs45 per kg. The 10kg bag’s wholesale and retail rates are fixed at Rs430 and Rs450 per bag, respectively.

Malik said the business delegation comprising of KWGA, Flour Mills Association, Retailers Association and others participated in the meeting chaired by the commissioner.

Due to rising flour price and gas tariff, consumers are now paying Rs12 for a roti as compared to Rs10 while sheermal and taftan rates are up by Rs5 each.

A rice wholesaler said the commodity’s prices had surged by Rs10-20 per kg but retailers are making windfalls by charging 30-40 per kg extra at their end.

Ghee and cooking oil prices went up by Rs20-30 per kg/litre over the last one year.

Meanwhile, veal meat with and without bones reached Rs540 and Rs640, from Rs500 and Rs600 per kg, followed by a hike in mutton price to Rs1,100-1,200, from Rs950-980 per kg.

Gas tariff for commercial rose by 31 per cent to Rs1,283mmbtu in the last one year while for residential customers (for up to 100 cubic metres a month) it is now Rs300mmbtu from Rs 127; tariff for up to 200 cubic metres increased to Rs553mmbtu, from 264mmbtu; up to 300 now stands at Rs 738mmbtu versus Rs275; and up to 400 swelled to 1,107mmbtu as against Rs780mmbtu.

Topline Securities Research Director and Chief Economist Syed Atif Zafar said the 50kg urea bag now costs Rs2,010, up by 10.4pc.

He said 50kg cement bag price fell by 6.8pc to Rs564 owing to competition among the players after start of new production lines at various cement factories.

“Consumer Price Index in Jan 1, 2019 was 5.5pc as compared to the current 12.63pc,” he said, adding: “The prices remained on the higher side mainly because of currency devaluation, which we call imported inflation.”

He said supply shocks because of discontinuation of trade with India also resulted in higher food prices while the increase in duties and taxes also contributed.

Zafar was of the view that power tariff for household and commercial rose by 17-18pc in the last one year.

In petroleum products, petrol and diesel rates rose to Rs116.60 and Rs127.26 per litre, from Rs90.97 and Rs106.68 per litre last January. Similarly, liquified petroleum gas is now available at Rs151.82 per kg versus Rs115 per kg from a year back.

LPG Distributors Association Senior Vice Chairman Ali Haider said surprisingly, local gas prices are linked with Saudi Aramco while legal imports and illegal arrival are being made from Iran. He attributed the hike to rise in international rates and rupee devaluation against the dollar.

CNG price now stands at Rs123 per kg as against Rs104 per kg in January 2019 owing to increase in gas tariff in July of the outgoing year.

Hike in petroleum prices also caused sharp rise in public transportation charges by Rs5-10 depending on the distance.

Published in Dawn, January 3rd, 2020