Adviser urges need to take necessary administrative measures to reduce high profit margin at wholesale 
and retail levels

ISLAMABAD   -   National Price Monitoring Committee (NPMC) has stressed that provincial governments should workout plan to ensure smooth supply of perishable items to avoid any undue price hike.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh chaired a meeting of NPMC. The NPMC reviewed the price trend of the essential commodities namely wheat flour, sugar, tomatoes, onions, vegetable ghee, potatoes and chicken on weekly basis. The finance secretary, while presenting the price trend of essential commodities, informed that according to latest SPI released by PBS, there is decline in the prices of 10 essential commodities for instance wheat flour, sugar, onions, tomatoes and chicken while the prices of 11 commodities have increased slightly. Price of 30 items remained stable. Adviser Finance expressed satisfaction over declining price trend in wheat flour, sugar, onion and tomatoes as compared to October 2020.

During the meeting, Adviser Finance urged the need to take necessary administrative measures to reduce high profit margin at wholesale and retail levels. It is our responsibility to ensure availability of the essential items for the consumers at affordable prices, he stressed.

The chair held a detailed discussion with the provincial chief secretaries regarding position of wheat and sugar stocks in the provinces and it was informed that at present, sufficient quantities are available to meet existing demand. Adviser Finance emphasized the provincial governments to ensure smooth supply of essential items.

Secretary National Food Security and Research presented a brief update on import of wheat during the meeting. The Logistics Committee played a key role in resolving issues related to wheat and sugar stocks among provinces, he underlined.

Provincial governments and USC should reassess their import requirements for wheat and sugar and take up with the Ministry of NFS&R accordingly and the matter may be placed before ECC for approval. M/o Industries & Production will take up the requirement of wheat and sugar for USC with PASSCO & TCP immediately.

The chair appreciated the efforts being taken by all the federal ministries, provincial governments and other relevant stakeholders for price control. He added that the same momentum must be maintained to provide maximum relief to the general public. He also stressed that provincial governments should workout plan to ensure smooth supply of perishable items to avoid any undue price hike. 

Ministry of Finance in its recent report said that inflation would ease down in the months to come. The main drivers of inflation (CPI) in Pakistan are international and domestic commodity prices, especially for food and oil products, the exchange rate and monetary and fiscal policies. Supply disruptions and inflation expectations have also played major role in the determination of prices of food and non-food items. 

In recent months, the international food prices have increased compared to last year while oil price is stable at a lower level. Further, the PKR exchange rate slightly appreciated against the USD when the first 4 months of 2020 are compared with the corresponding months of 2019. Thus, easing out inflationary pressures is expected. 

There is no change in indirect tax or other measures which may cause inflationary impact. Likewise, interest rate is kept unchanged. The CPI level reacts to the aforementioned developments with a time lag, implying that they contain relevant information for short term inflation prediction. 

On the basis of this information, MoM headline inflation is expected to be around 0.9 percent in November (margin between -0.3 and +1.4 percent) against 1.7 percent in October 2020 and 1.45 percent in October 2019. YoY headline inflation in November is expected to settle around 8.5 percent (but within a broad uncertainty margin between 7.6 and 9.0 percent) compared to 8.9 percent in October 2020 and 11.0 percent in October 2019. It seems that tendency of inflation easing will prevail in coming months.