KARACHI: Annual urban consumer-price inflation likely to hit a double-digit figure by the end of April, adding pressure on the government to check runaway prices before Ramazan begins next month, analysts said on Saturday.
Prices usually shoot up in the run-up to Ramazan, but this year the increases come on top of an inflation rate that has almost doubled since June last year. Consumer price index, measured inflation, touched 9.4 percent in March 2019, a five-year high.
Food prices have increased almost up to 97 percent from September 2018 to March 2019, while experts warned of further hike in prices in the months ahead on prevailing economic uncertainty in the country.
Prices of daily use items such as farm chicken, pulses, rice, cooking oil, ghee, vegetables, fruits and sugar, etc remained higher than the average inflation data during the period.
Farid Qureshi, secretary general of Karachi Retail Grocers Association, said significant increase was witnessed in the prices of food items in the last seven months. “Prices of oil, ghee, sugar and squashes surged around 40 percent, one kilogram of sugar increased by Rs20 to Rs70 from Rs50,” he added.
Rice varieties were being sold in between Rs100 to Rs200/kilogram, he said, adding that customers, who used to buy the top quality for Rs200/kg, were now buying rice of Rs150/kg.
“They buy top quality rice for parties only,” he said. “Similarly, those who used to purchase two packets of biscuits are now buying only one.”
In the list of 53 essential items covered by the Pakistan Bureau of Statistics, Karachi witnessed highest price increase on farm chicken with a rise of Rs82.5 to Rs204.78 in March from Rs122.31 in September. It was an increase of 67 percent.
Prices of pulses, an important household item in the middle income households, have increased by 18 to 20 percent during this period in the metropolitan. Some vegetable prices also shot up by 18 percent.
Lahore witnessed the highest price increase of 57.38 percent on farm chicken. It followed with prices of banana, tomatoes, whereas, prices of rice, cooking oil and sugar also remained above 10 percent.
Chicken prices led in Islamabad as well, with an increase of 37.6 percent, which was followed by tomatoes, bananas, pulses and rice. Price of chicken saw an increase of 50 percent in Peshawar, followed by tomatoes, pulses, bread, sugar and bananas.
Quetta witnessed highest price increase in one item, tomato, which increased by 97 percent to Rs89/kg from Rs45/kg. Chicken price increased by 36.75 percent in seven months. The other surges were noted in the prices of rice, vegetable ghee, eggs, sugar, and cooking oil.
Aftab Alam Khan, an international expert on food and agriculture, said that lower and middle income people usually spend 40 to 50 percent on food. “When food item prices increase, middle class or lower class people shift to substandard food items and compromise on health,” he said. “Food item prices are linked not only to nutrition, but health too.”
Like controlling the prices of medicine, he said, the government should immediately control prices of food items as well; otherwise they would further go up in Ramazan. “There must be immediate impact on prices, particularly when Ramazan is coming, when food prices go up.”
He said people should also expect unconventional things. There was dependence on utility stores. Sometimes, shopkeepers come and buy from these stores, while consumers hardly find items in utility stores or stay in long queues.
“Administrative and marketing measures should be taken on the same footing as was done for medicine prices,” he suggested. “If such measures are not taken in a week or 10 days, prices will go up. Middlemen, dealers in the markets, should also be dealt with.”
Qasim Shah, a development analyst, said that purchasing power of the people had decreased in the last one year, mostly for people who depended on daily wages.
A daily wager in Lahore, who could buy 21.7kg wheat flour in a day last year, could now buy only 20kg. Wages were lower in Peshawar. Last year, a worker in Peshawar could buy 15.3kg wheat flour from his daily income, now it has been reduced to 14kg only.