Commodity prices: Govt to consider ban on onion and tomato exports

Both commodities saw big price increase as demand rose in regional markets .

Shahbaz Rana November 12, 2013
Domestic supply of onions may improve after the arrival of Sindh’s produce in the market. PHOTO: REUTERS


The government will today (Wednesday) consider imposing a ban on export of tomato and onion after prices for both the essential commodities skyrocketed, which demanded a review of the export policy and factors behind the price rise.

The Economic Coordination Committee of the Cabinet (ECC), the country’s highest economic decision-making forum, will review the possibility of imposing a ban on export of both the commodities, according to sources.

The Ministry of National Food Security and Research had moved a summary to consider the last ECC meeting held on November 6 but, due to ‘pressing engagements’ of the ECC chairman, who happens to be Finance Minister Ishaq Dar, the ECC could not take up the important summary for a decision.

The summary has been placed on the ECC agenda for today’s meeting. Due to delay in taking policy and administrative actions, prices of both the items have constantly increased in retail and wholesale markets. The International Monetary Fund’s (IMF) preference for free markets may affect the ECC’s decision, as the country is effectively on the IMF’s radar.

According to the weekly Sensitive Price Index, which is calculated by the Pakistan Bureau of Statistics, the prices of onions, tomatoes and potatoes saw significant increases. The prices of tomatoes, which were available at Rs82 per kilogram at end of October, increased to Rs122 per kilogram within a span of a week, showing an alarming rate of increase of almost 50%.

As compared with the same week of the last year, tomatoe prices soared 186.5% last week, according to the PBS’s statistics.

Similarly, the price of onions increased from Rs53 per kilogram to Rs60 week on week by November 7, depicting 12.5% increase. As compared to the previous year, onion prices have soared by 80%, according to the PBS.

Tight demand-and-supply situation of onions was seen while tomato supplies were also far less than the demand, according to an official of the Ministry of Food Security. He said the ministry had presented the demand and supply situation and comparison of previous years and now it was up to the ECC whether to slap a ban or not.

Pakistani onions and tomatoes are in great demand in India and the Gulf. There was also a shortage of onions in Indian markets as bad weather adversely impacted the crops. The domestic supply of onions may improve after arrival of Sindh’s produce in the market.

While the government may impose a ban on export of these commodities, it has yet to find a solution to the problems of smuggling and hoarding. Officials admitted that there were no effective border controls to curtail smuggling, which will minimize the impact of any ban on increasing prices.

The federal government has also yet to develop a mechanism to improve coordination with the provinces to check increasing prices. After abolition of the magistrate system, the provinces find it difficult to check prices in the retail markets.

Published in The Express Tribune, November 13th, 2013.

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amanat ali | 9 years ago | Reply

PML(N) has appointed its own faithful persons in the fruit and vegetable markets who are earning huge money by way of commissions from the fruit and vegetable dealers and they are fully responsible for rise in the prices of commodities. Prices cannot be reduced in these markets unless honest people are appointed.This is a difficult task to find honest persons when corruption in the country has crippled the whole system of the country.

whitesky | 9 years ago | Reply

Iinstead of banning the export of onions and tomatoes altogether better increase the duties temporarily so as to make the export unfavorable/ unviable.

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