Branded ghee and cooking product manufacturers have increased prices despite declining palm oil import costs.
A retailer noted that the price of branded ghee and cooking oil has risen by Rs80 per kg/litre to Rs570, with some major brands seeing increases of Rs100 per kg/litre.
Sheikh Umer Rehan, Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), explained the discrepancy in pricing. He mentioned that while the global market price for palm oil had previously surged to $1,285 per tonne, it later settled at $1,185. This adjustment led to a reduction in the local open market rate from Rs19,000 to Rs16,500 per maund.
Consequently, Rehan pointed out that the prices of ghee and cooking oil, which had initially increased by Rs80 per kg/litre, saw a decrease of Rs40 by smaller and medium-sized firms, which hold a significant market share.
Rehan added that brands heavily advertised on TV, representing about 5% of the market, typically experience delays adjusting their prices due to complexities in their printing, distribution, and marketing networks. He predicted a gradual decrease in branded ghee and cooking oil prices.
Pakistan relies heavily on imports for its palm oil, sourcing 90% from Indonesia and 10% from Malaysia. The country’s annual ghee and cooking oil consumption totals five million tonnes, necessitating the import of 3.5 million tonnes of palm oil.
While Pakistan offers a 15% duty concession under the FTA, Malaysia has not reciprocated with similar concessions for Pakistani exports. Rehan urged the Malaysian government to extend comparable benefits to strengthen trade and cooperation.
