SPI inflation accelerates on rising tomato, onion prices

KARACHI: Weekly inflation increased 0.29 percent week-on-week and 29.44 percent year-on-year during the seven-day period ended October 6, as prices of perishables continued to surge on account of import hurdles.

Pakistan Bureau of Statistics (PBS) data issued on Friday attributed the WoW spike in sensitive price indicator (SPI) to the surge in prices of tomatoes (27.40 percent), onions (10.22 percent), bananas (2.24 percent) and powdered milk (1.18 percent).

During the previous week ended September 29, SPI increased 0.94 percent WoW and 30.64 percent YoY.

Fahad Rauf, head of research at Ismail Iqbal Securities, in his note said SPI increased because the prices of perishables continued to spike. Mainly the prices of onions and tomatoes stayed on an upward trajectory likely due to reduced import from Iran and Afghanistan and lack of local crop due to floods.

“Iran has some festival so their domestic consumption has increased; with Afghanistan there have been some tensions at the border,” he said.

He reminded that prices of perishables had shot up after the floods, and then came down following imports, while the impact on SPI was partially diluted by reduction in petroleum prices.

“We estimate October 2022 CPI (consumer price index) at 4.2 percent MoM (26 percent YoY), where high perishable prices and low base effect of electricity FCA (fuel charge adjustment) would be main drivers,” Rauf added.

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

Average price of a kilo of tomatoes was Rs225.27 during the week under review from Rs176.82 last week

and Rs55.44 last year. This showed a massive surged of 305.60 YoY and 27.4 percent WoW. However, in some urban markets like Karachi, the maximum recorded price during the week was Rs300/kg.

A vegetable vendor in North Nazimabad said he was selling the commodity for Rs260-280/kg, depending on the time of the day.

Another essential commodity that saw a price surge was powdered milk. The price of a 390 gram polybag of NIDO increased by 1.18 percent WoW to stand at Rs586.19 during the week under review compared to Rs579.37 last week. On YoY basis, the increased by 18.2 percent from Rs495.95.

PBS attributed the YoY increase

in SPI to the increase in prices of

tomatoes (305.60 percent), onions (167.80 percent), diesel (92.08 percent), petrol (76.07 percent), pulse gram

(70.02 percent), pulse masoor (64.65 percent), cooking oil 5 litre (61.43 percent), mustard oil (61.21 percent), washing soap (60.68 percent), vegetable

ghee 2.5kg (57.66 percent), pulse mash (55.50 percent), vegetable ghee 1kg (55.37 percent) and pulse moong (48.34 percent).