ISLAMABAD: Inflation eased to 8.4 per cent in July, from 9.7pc in June, on the back of a slight drop in prices of food products, showed the data released by the Pakistan Bureau of Statistics (PBS) on Monday.

The ease had started in April when it reached 11.1pc. The decline is mainly led by a drop in agriculture products.

In the outgoing financial year, the annual inflation was recorded at 8.90pc against 10.74pc in the previous year.

The subdued production of sugar and wheat had also contributed to an increase in food inflation in the last two years. On the other hand, the government has increased prices of petroleum products substantially, causing a rise in non-food inflation.

Food inflation is still at a higher level, posting a rise in the outgoing month. In urban areas, it jumped by 9.4pc in July on a yearly and 1.5pc on a monthly basis, whereas the respective price level growth in rural areas stood at 7.3pc and 1.6pc.

Tarin reviews prices of food items

A meeting of the Price Monitoring Committee, presided over by Finance Minister Shaukat Tarin, on Monday reviewed the prices of wheat, sugar, pulses, chicken and other essential food items.

The Secretary to the Ministry of Food Security, Ghufran Memon, briefed the committee about the wheat procurement process. He said an order for purchase of 220,000 tonnes of wheat had already been placed.

The committee directed the Ministry of National Food Security to take immediate steps for the import of two million tonnes of wheat to ensure its adequate stocks in the country.

The Secretary of the Ministry of Industries and Production, Kamran Ali Afzal, briefed the meeting about the efforts under way for import of 600,000 tonnes of sugar for maintaining buffer stocks. He said the tendering process had been initiated and adequate stocks of sugar would be available in the country until the next season.

The committee ordered the ministry of industries to expedite the tendering process and update it on a weekly basis.

Mr Tarin reiterated the government’s firm commitment to building strategic reserves of sugar, wheat, pulses, edible oil/ghee, etc., to ensure price stability and prevent profiteering and hoarding.

The meeting was told that the strategic reserves would ensure timely availability of basic commodities to bridge the gap between supply and demand.

The finance minister directed the secretary, minitry of food security, to come up with a plan and place it before the committee for discussion and approval.

The PBS data show that in urban areas, food items which saw an increase in prices in July from the previous month included tomatoes 82.40pc, onions 34.53pc, vegetable ghee 6.70pc, cooking oil 6.56pc, sugar 5.08pc, potatoes 4.89pc, pulse gram 4.89pc, vegetables 3.69pc, eggs 3.48pc, condiments and spices 2.65pc and mustard oil 1.54pc.

In urban areas the prices of pulse moong declined by 11.36pc, maash by 5.18pc, masoor by 1.24pc, gram whole by 0.92pc, chicken by 10.07pc and fruits by 7.51pc.

In rural areas, prices of tomatoes went up by 101.63pc, onions by 47.62pc, potatoes by 12.66pc, vegetables by 5.16pc, sugar by 4.33pc, vegetable ghee by 3.16pc, cooking oil by 2.27pc, mustard oil by 1.30pc, milk by 1.19pc and rice by 1.05pc.

Meanwhile, non-food inflation in urban centres was recorded at 8.2pc year-on-year and 1.1pc month-on-month whereas in rural areas it rose by 8.7pc and 1.2pc, respectively. The increase in non-food inflation was mainly driven by a hefty rise in oil prices in July.

Core inflation in urban areas was 6.9pc in July as against 6.7pc the previous month. In rural areas, the corresponding increase was 6.9pc and 7.8pc, respectively. The central bank determines the key policy rate — currently at 7pc — based on the core inflation rate.

Average inflation measured by the sensitive price index eased to 16.2pc during July from 17.6pc a month earlier, while the wholesale price index dipped to 17.3pc during the month under review from 20.9pc.

Finance Secretary Yousuf Khan briefed the meeting on the prices of petroleum products in neighboring countries. The committee was told that the per unit cost of petrol and electricity were cheaper in Pakistan than other countries in the region.

It said the government had absorbed the pressure in order to provide maximum relief to consumers.

The finance minister directed the Petroleum Division to analyse the impact of the current escalation in LNG prices on the consumption of other fuels in order to look for alternatives and ensure availability of sufficient stocks.

Mr Tarin highlighted the rising trend in international commodity prices amid Covid-19 pandemic and underscored the efforts being made for keeping the prices of essential items in check. He stated that any assistance, financial or otherwise, needed in this regard would be provided to the provincial administrations and departments concerned for effective monitoring and to lessen the burden of price fluctuation due to international price hike.

Published in Dawn, August 3rd, 2021