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Here’s Why Basic Commodities are Expensive in Pakistan

Federal Minister for Finance and Revenue, Shaukat Tarin, chaired the meeting of the National Price Monitoring Committee (NPMC) at the Finance Division today.

The NPMC reviewed the price trend of essential commodities, especially wheat flour, sugar, edible oil/ghee, pulses, and chicken, during the last week. While briefing the NPMC about weekly SPI, the Finance Secretary apprised that prices of 07 basic commodities registered a decline, whereas 26 items remained stable during the week under review.

Federal Minister for National Food Security and Research, Syed Fakhar Imam, updated the NPMC about the wheat procurement drive of the Provinces and PASSCO to ensure a steady supply of wheat at fair prices during the current year.

He further apprised the NPMC that Punjab is ahead of other Provinces in the procurement of wheat to date.

Secretary M/o NFS&R informed the Committee that the summary to import 4 million metric ton wheat would be presented before the next ECC for requisite approval to build strategic reserves and to ensure a smooth supply of wheat across the country.

While taking stock of the situation, the Finance Minister directed all the Provincial Governments to ensure the daily release of wheat at subsidized rates in compliance with the directives of the Prime Minister. He strictly urged the representatives of the Provincial Governments to ensure uninterrupted daily release without fail.

While reviewing the price trend of basic commodities in international markets, the NPMC noted that the major driver behind the increase in prices of items of daily use is the massive international price hike due to the ongoing COVID-19 crisis.

The Year-on-Year comparative analysis indicated that the price of Crude Oil increased by 178 percent in April 2021 compared to April 2020. Similarly, the price of sugar in the international market increased by 57 percent on a year-on-year basis.

Furthermore, international prices of Palm oil, Soybean oil, and wheat also registered a continued upward trend which, in turn, led to a sharp increase in prices of basic items in domestic markets.

Speaking at the occasion, the Finance Minister stated that the COVID-19 crisis inflated food prices in international markets, especially edible oil, sugar, tea, and wheat. The Government is making an all-out effort to ensure a smooth supply of basic items through a network of Ramadan Sahaulat/Saasta Bazaars and a chain of USCs outlets to ease shortages and mitigate price increase in domestic/local markets.

The Chairperson, Competition Commission of Pakistan (CCP), presented findings before the Committee regarding the completion of a recent inquiry in the Poultry Industry. The CCP underlined some anticompetitive conduct that led to a surge in prices of Chicken feed, which, in turn, increased prices of Chicken.

The Finance Minister stressed that cartelization would not be accepted at any cost. Stern action would be taken by the Provincial Administrations and Departments concerned to keep the prices of basic commodities in check. All those responsible for undue profiteering or hoarding would be taken to task, he concluded.

Federal Minister for National Food Security and Research, Syed Fakhar Imam, Adviser to the PM on Commerce, Abdul Razak Dawood, SAPM on Finance and Revenue, Dr. Waqar Masood, Secretary Finance Division, Secretary M/o NFS&R, Chief Secretaries of the Provincial Governments, Member PBS, MD Utility Stores Corporation, Chairperson CCP and other senior officers of various Ministries participated in the meeting.

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ProPK Staff