KARACHI: Falling world prices of various commodities owing to the coronavirus has diluted the impact of rupee devaluation against the dollar on local prices of imported items.
Market people said that in addition to the declining trend in world prices, local prices of imported pulses, spices, chemicals, tea, palm oil, plastic items etc have remained intact since dollar has been climbing up from Monday onwards, followed by low demand of these goods in the local market.
From its closing value of Rs154.25 on Friday, the dollar has rose to Rs159.30, thus making imports costlier.
Pakistan Vanaspati Manufacturers Association former chairman and Korangi Association of Trade and Industry (Kati) Chairman Sheikh Umer Rehan said coronavirus has kept palm oil prices under pressure as it had fallen by $25-30 per tonne in just one day.
“This decline in palm oil rate has offset the impact of dollar appreciation on local prices,” he said, adding if palm oil was going up then the sliding rupee would have pushed up ghee and cooking oil price by Rs3 per kg/litre. The government collects up to 35 per cent duties and taxes on import of palm oil.
A tea importer estimated an average jump of Rs20 per kg in tea price but he elaborated that slightly lower world tea prices had nullified the impact on local rates. “This is a short-term impact. If world prices go up, then the local would go up by Rs20 per kg,” he feared.
Karachi Wholesalers Grocers Association (KWGA) Patron-in-Chief Anis Majeed said the prices of imported pulses had been unchanged despite almost 3.27pc rupee depreciation since Monday.
“There is lack of demand for pulses from the retailers locally while world market is also crawling down amid coronavirus fears,” he said.
Calculating an impact, he said the price of pulse currently at Rs150 per kg would have gone up by Rs5 more but this did not happen owing to low demand from retailers in the wholesale market.
“I have released my pulses consignments today as per Rs159.30 a dollar while two days back I released the same commodity at the rate of Rs157.10,” Anis said, adding “importers have suspended fresh buying of pulses because of uncertain rupee-dollar parity, falling world prices and coronavirus epidemic.”
He added that importers are paying high dollar price to clear their consignments from the port to avoid demurrage charges for late clearance.
Importer of pulses, chemicals, spices and plastic items and Karachi Chamber of Commerce and Industry (KCCI) former president Haroon Agar that prices of these items in local markets have remained pegged to their old levels despite dollar rise.
Foreign suppliers are not giving rates of these items in view of coronavirus and dropping crude prices followed by 15-20pc fall in plastic and pulses rates in world markets. As a result, their local importers have also suspended entering into a fresh contract with foreign buyers for the last 20 days, he claimed.
Nasir Arian, marketing manager at a fast moving consumer good (FMCG) company said the price has so far remained intact as demand is not picking up pace due to already rates of these items.
The prices of imported FMCGs are already high owing to previous rupee depreciation against the dollar. He said smuggling of FMCGs is thriving due to high duties and taxes which the government imposed to compress the demand of imported items.
