Food inflation

While the wealthy and middle classes struggle to maintain their standards of living amid unprecedented inflation, the poor are finding it even hard to feed themselves. After a Rs5 per kg hike on flour in Sindh, the prices of cooking oil and ghee shot up by Rs30 per kg midweek. The Sindh government apparently enjoys hurting the poor. Why else would it have allowed the food minister to claim earlier this month that retail flour prices would fall by over Rs40 in the near future? Why else would it allow flour mill owners, who had earlier agreed to reduce prices, to raise them by Rs5? But the government is not the only party to this lie. Representatives of Karachi’s wholesalers and grocers met the city commissioner earlier this month and agreed to set the prices of flour at Rs45 per kg. The price agreement has obviously not been abided by.

Consumers have obviously been critical as well. The state-run Pakistan Agriculture Storage and Services Corporation had agreed to provide 300,000 tonnes of wheat to Sindh on top of 100,000 tonnes it had already provided. Despite this, consumers are now paying record-high prices. The fact that grain stocks are high and the country saw a good wheat crop yield last year is just another shot in the arm. On the flip side, mill operators claim they did not receive some 20,000 tonnes of wheat that the provincial government was supposed to provide in December, and only 14,000 tonnes out of an allocation of 62,000 tonnes in the first two weeks of January.

And then there are is the grocers’ association that claims that leading cooking oil manufacturers unilaterally increased prices, despite the declining palm oil prices in global markets for most of the last year. Manufacturers reportedly claimed that prices had risen again recently, but that would not account for the fact that the consumer prices were even rising when raw material prices were falling. Not a news that price lists for produce are rarely, if ever, enforced. Sooner or later, the government’s inability to control the prices of even the most basic of food items is going to hit where it hurts.

Published in The Express Tribune, January 18^th, 2020.

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