Retail and Wholesale Food Price Disparities: An Examination of the Gap in Prices.
Published on: December 3, 2023.
Filed under:
Consumers Await Price Relief Despite Favorable Conditions
Despite a drop in world prices of raw materials and edible items, as well as a recovery of the rupee against the dollar and low transportation costs, consumers in Pakistan are still grappling with high utility bills and have yet to see any significant price relief. While both manufacturers and retailers share some responsibility for the lack of price reduction, the government has focused on curbing sugar and wheat hoarders and smugglers. This crackdown has led to a decrease in sugar prices, but wheat and flour prices have remained unchanged.
According to data from the Pakistan Bureau of Statistics (PBS), wheat imports have decreased compared to the previous fiscal year, resulting in a drop in prices. However, the prices of wheat flour have not seen a major downward trend. The recovery of the rupee against the dollar should have led to lower prices, but manufacturers have not passed on the benefits to consumers.
In addition to the favorable currency exchange rates, transportation costs have also decreased. However, manufacturers have not utilized this decrease to benefit consumers. Despite these missed opportunities for lower prices, the private sector has been importing wheat to manage the demand and supply gap, preventing a flour shortage.
The import of pulses has also increased, with consumers still paying higher prices despite a drop in average per tonne prices. Prices of pulses remain inflated due to factors such as the availability of dollars and retailers not reducing prices despite a decline in wholesale rates.
While retailers face challenges such as high power bills and old stock clearance, consumers continue to bear the brunt of high prices. Among the rising prices of various commodities, rice stands out as its export has increased. Non-basmati rice exports have surged thanks to a ban imposed by India, which has opened up new opportunities for local rice exporters.
Overall, consumers in Pakistan are eagerly waiting for price relief as they struggle with high utility bills. While favorable conditions exist, manufacturers and retailers need to take the initiative to pass on the benefits to consumers.
Source: Dawn
