Retailers profiteering over increased demand for milk for Sabeels

The price of milk has gone out of control across Karachi after Muharram’s Sabeels started being set up in different parts of the city. These stalls offer milk, juices and cold water to the participants of the holy month’s processions.

There have been reports of milk being sold for as high as Rs150 a litre. A milk retailer in Gulistan-e-Jauhar told The News on the condition of anonymity that milk is being sold between Rs120 and Rs140 across the city due to the sharp increase in its demand.

“Currently, milk is being sold at high prices only to those people who are buying it in bulk for the Sabeels and not to the regular customers,” said the shopkeeper. Karachi Commissioner Iftikhar Shallwani, who is responsible for controlling the price of milk, seems to have done nothing about the exorbitant rates at which the commodity is being sold.

“Shops are raided and fines are imposed,” he said, but he did not provide a response when he was asked about the number of shops that were raided in each district of the city. Ironically, the official price of milk set by the Commissioner Office is still Rs94 a litre.

How it started

The three farmers associations jointly increased the wholesale rate of milk from Rs85 to Rs96 a litre in early July. Currently, there are three associations of dairy farmers that supply milk to Karachi: the Karachi Dairy Farmers Association, the Dairy Farmers Association and the Karachi Dairy & Cattle Farmers Association.

After their joint increase in the wholesale rates, the retail rate of milk reached Rs110 a litre, as the retail price of milk has to be generally around 10 per cent more than its wholesale price. Back in early July, the retailers had refused to accept the dairy farmers’ increased rate and had taken the matter to the Commissioner Office, which is responsible for notifying the milk price.

In the second week of July, a meeting was held at the Commissioner Office in which all the associations involved in the milk trade were present. It was decided there that milk will continue to be sold at its previous price in the city until July 17, following which the price will be revised in accordance with the rate of inflation and the rise in the production cost of milk, determined by the State Bank of Pakistan.

Since no meeting took place after that, the Milk Retailers Association increased the retail price to Rs110 a litre. Several crackdowns against milk retailers were carried out in the wake of the price hike for a brief period of time and then the increased price was accepted generally, if not officially.

Profiteering

A resident of Federal B Area named Sheharyar Ali Jafri shared with The News that he had bought milk in bulk from the Water Pump area at Rs125 a litre.

“We set up milk Sabeel every year and simply didn’t want to skip it this year due to a hike in milk prices,” he said, adding that never in his lifetime has he seen such an extreme price hike of milk due to Muharram.

Jafaria Disaster Management Cell chief Zafar Abbas bought dry milk for his more than 100 Sabeels across the city. He said that the price of milk was so high that they could not afford to buy it.

Shortfall

Amjad Ali of the Milk Retailers Association said that due to the increase in milk’s demand, they have to buy it from the open market to meet the shortfall. As for those who are seeking milk in large quantities, he said the retailers sell them at higher rates. He assured that the price of milk will go back to Rs110 a litre after 10th Muharram.

Karachi Dairy & Cattle Farmers Association chief Shakir Umer said that the milk production in the city is 0.4 million litres against the demand of 0.5 million litres. He said that the retailers are charging high prices just to mint money from the residents of the city during this month, while the commissioner is just another silent spectator.