SPI inflation down 0.11 percent as prices of petrol, perishables decline

KARACHI: Fall in prices of petrol and perishables pushed weekly inflation lower by 0.11 percent, while it remained high on year-on-year basis at 28.76 percent during the seven-day period ended December 22.

Pakistan Bureau of Statistics (PBS) issued on Friday attributed the WoW decline in sensitive price indicator (SPI) to decrease in the prices of tomatoes (23.85 percent), potatoes (10.53 percent), eggs (1.54 percent), sugar (1.04 percent), bananas (0.80 percent), vegetable ghee 1 kg (0.53 percent), onions (0.39 percent), garlic (0.35 percent) and vegetable ghee 2.5 kg (0.22 percent), non-food items, petrol (4.45 percent), diesel (3.20 percent) and LPG (0.23 percent).

However, it also noted a rise in the prices of chicken (9.86 percent), pulse masoor (2.00 percent), tea (1.72 percent), rice irri-6/9 (1.15 percent), and wheat flour (1.12 percent).

The rise in chicken price was expected due to a shortage of soybean meal, whereas the price of tea is connected to imports and thus dollar rates as well.

Fahad Rauf, head of research at Ismail Iqbal Securities, in his note said the decline in SPI was mainly because of Rs10 reduction in petrol prices and a decline in the cost of perishables. “Tomato prices remained on downward path, down by 70 percent from their post-flood peak of Rs225/kg,” he noted.

On the other hand, as expected, chicken prices rose by 10 percent WoW mainly owing to soybean meal shortage. There might be some relief on this front, as according to news reports, the government has finally approved the release of 9 stuck soybean consignments.

“We estimate December CPI (consumer price index) at 24.1 percent vs 23.8 percent in November 2022,” Rauf added.

Poultry feed cargoes were stuck at the Karachi port due to a tussle between feed importers and the Department of Plant Protection, which claims that import of modified soybean was not allowed into the counry.

Last week, SPI had plunged to a 9-week low at 0.40 percent despite gloomier year-on-year data, which was up 29.42 percent.

PBS compiles SPI via collecting prices of 51 essential items from 50 markets in 17 cities of the country. During the week, prices of 20 (39.22 percent) items increased, 14 (27.45 percent) items decreased and prices of 17 (33.33 percent) items remained stable.

On YoY basis, massive increase has been recorded in the prices of onions (482.30 percent), chicken (67.42 percent), tea (65.41 percent), diesel (65.05 percent), petrol (52.19 percent), powdered salt (51.99 percent), bananas (47.95 percent), pulse moong (47.13 percent), eggs (47.07 percent), pulse gram (45.24 percent) and mustard oil (40.97 percent).