Inside Financial Markets
NPMC analyzes price hike in essential commodities

NPMC analyzes price hike in essential commodities

The National Price Monitoring Committee (NPMC) Monday reviewed price mechanism for essential commodities and evaluated the reasons for increase in their prices with particular focus on perishable items.

The NPMC meeting was held under the Chairmanship of the Special Secretary Finance, according to press statement issued by the Finance Ministry here.

The meeting was convened on the directions of the Prime Minister’s office to discuss the abnormal variation in the prices of perishable items such as tomatoes, potatoes, onions as well as other essential items like wheat, sugar and chicken.

The meeting was attended by the representatives from the provincial governments, Islamabad Capital Territory, Ministries of Industries, Commerce and National Food Security & Research (NFS&R) along with Competition Commission of Pakistan and Pakistan Bureau of Statistics. The meeting was informed that CPI inflation year on year is recorded at 9.0 % in September 2020 as against 11.4 percent during the same month last year.
The meeting also noted that average inflation during July-September FY 2020-21 also showed a declining trend and recorded at 8.8 percent as compared to 10.1 percent same period last year.

It was, however, noted that the profit margin between wholesale and retail has risen especially in potatoes, tomatoes and onions which are affecting the common man.

It was observed during the meeting that an upward trend was witnessed in prices of perishable commodities during Sept-October 2020. The reason cited for the upward pricing trend was unprecedented rainfall which adversely affected the local produce.

The price hike is likely to stabilize by November, 2020 onwards when local produce would be available in the markets. It was observed with concern that the difference between wholesale and retail prices of the essential commodities is becoming a serious challenge for the Provinces.

The representative from Ministry of NFS&R informed that seven vessels carrying 0.433 million MT of wheat from the private sector have been arrived in the country while TCP has been allowed to import 1.650 million tons. TCP has so far arranged 0.330 million tons which is expected to be arrived in October (4 Ships) and in January 2021(2 Ships).

The representative from Ministry of Industries and Production informed that TCP would import 151,700 tons of sugar.

He added that private dealers stocks 0.445 million tons are available till 04th November whereas Sindh Cane Commissioner reported total stock of sugar is at 0.565 million tons which will be available till 9th November 2020.

The representative from Punjab government informed that crushing of sugarcane will be started in the first week of November. Punjab government has imposed heavy fine through legislation in order to expedite the timely crushing of sugarcane whereas the representative from Sindh government also informed that crushing will start by mid of November, 2020.

The NPMC meeting Chaired by the Special Secretary Finance, called upon the district administrations to remain vigilant and control the prices of essential commodities namely tomato, potato, wheat, sugar etc. through strict price enforcement.
The focus should be to minimize price disparity between the wholesale and retail prices of the essential commodities which leads to inflation.

The Chair urged the Provincial Governments to take corrective measures to check undue profit margin in basic commodities.

It was further suggested that Provincial Governments should provide support to market committees in collaboration with district administration to play proactive role by removing price disparity among Provinces and also ensure the smooth supply of essential items.

Syed Zaki Hussain

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)