KARACHI: A new wave of food inflation has emerged despite a cut in transportation charges on account of a drop in diesel rates.

Nestle Pakistan Limited (NPL) and FrieslandCampina Engro Pakistan Limited, the manufacturers of Milk Pak and Olpers, respectively, have announced a hike of Rs20 in the price of one-litre pack, taking it to Rs200 without citing any reason in the letters handed over to market retailers.

An Olpers 250ml tetra pack and pouch now cost Rs55 instead of Rs50.

When contacted, an official at Nestle Pakistan Ltd attributed the price hike to rising inflation.

Milk, flour, vegetables become costlier

Meanwhile, an official of the Pakistan Dairy Association (PDA) said the association cannot comment on the price hike and only companies can provide answers.

The five and 10kg bags of flour by brands Bake Parlour and Ashrafi, which were available at Rs490 and Rs960 before Eidul Azha, are now priced at Rs540-550 and Rs1,050-1,100, as retailers blamed manufacturers for jacking up prices.

In the third week of June, Sindh’s flour millers raised the prices of various varieties of flour by Rs6 per kg, taking the price of flour No.2.5 to Rs88 per kg, fine and super fine flour to Rs91 per kg, and that of a 10 kg bag from Rs785 to Rs885.

General Secretary Karachi Retail Grocers Group (KRGG) Farid Qureishi said the chakki flour rate now hovers between Rs105-110 instead of Rs100 per kg.

Mr Qureishi said a number of biscuit manufacturers have increased rates from Rs25 pack to Rs30, while the pack costing Rs5 now costs Rs7.

He said that in some cases, the number of biscuits have been reduced to three from four, thus keeping the price at Rs10.

Many companies have also curtailed the supply of biscuits in the markets to release fresh stocks with new price tags, he added. Mr Qureishi said soft drink makers have also increased the rates by Rs10.

Now, 500ml sells at Rs70, while one-litre and 1.5-litre bottles are selling at Rs100 and Rs130 against Rs90 and Rs120.

“Manufacturers are passing the higher transportation charges, packaging charges, and other expenses on imported raw materials, which have risen due to falling rupee against the dollar,” he said.

However, he urged the government to check manufacturers’s claims of high production costs that are being passed on to the consumers mercilessly.

The prices of onion has risen to Rs90-100 per kg from Rs80 per kg ahead of Eid. The price of Turrai (ridge gourd) and Lokki (bottle gourd) has surged to Rs200 per kg from Rs80-100 per kg prior to Eid.

During Eid holidays, retailers charged Rs400 per kg for shimla mirch (capsicum), which has now plunged to Rs200 per kg while it was priced at Rs160 per kg before Eid. The price of okra had also risen to Rs200 per kg from Rs150 per kg, while the tomato price had dropped to Rs80-100 from Rs160 during Eid days.

Green chillies were sold at Rs200 per 250 gram during Eid days, which had dropped to Rs60 per 250 gram.

Haji Shahjehan, president of the Falahi Anjuman Wholesale Vegetable Market Super Highway, attributed price fluctuations to demand and supply gaps caused by heavy rains in Sindh and Balochistan, as Karachi does not produce any vegetables other than Malir peas.

Mr Shahjehan said the government has various departments but they do not have any strategy to manage supply chain mechanisms more effectively to control prices in case of any emergency like situations caused by rain and floods.

Published in Dawn, July 17th, 2022