20pc disparity in wholesale, retail prices hits essential items

ISLAMABAD: The recent interest rate cut of 2.5pc has not closed the significant price gap between wholesalers and retailers. A 20pc difference remains, with some essential items showing even bigger disparities.

A whopping 20pc gap persists, according to the National Price Monitoring Committee, with the federal capital exhibiting striking price variations — 46pc for ginger, 35pc for potatoes and 25pc for fresh milk. Similarly, provincial markets in Sindh, Punjab, Balochistan and Khyber Pakhtunkhwa grapple with significant price differences.

In the wake of the declining Consumer Price Index (CPI), there are expectations that the policy rate is expected to reduce further in the months ahead if the prices continue to fall. There are also expectations in the market that the next Monetary Policy Committee (MPC) will further reduce the policy rate. The Planning Minister, Ahsan Iqbal, chaired a meeting of the National Price Monitoring Committee to deliberate on strategies for price stabilization and managing the supply-demand dynamics across Pakistan. It reviewed the recent inflation data, particularly in food and essential commodities, using insights from the Pakistan Bureau of Statistics (PBS) on the Consumer Price Index (CPI). Minister Ahsan Iqbal emphasized the need for data-driven strategies in price monitoring, advocating for detailed reports on inflation drivers to facilitate targeted interventions.

In October 2024, non-perishable food items experienced a controlled rise of 1.01pc as compared to the previous month and a decrease of 1.46pc compared to last year October 2023. A major decrease was observed in the prices of wheat flour (-34.73pc), sugar (-9.15pc) and cooking oil (-10.2pc). Overall, the food inflation reflecting high stability in the prices declined from 28.9pc in October 2023 to 2.7pc in October 2024 in urban areas and declined from 28.6pc in October 2023 to 0.6pc in October 2024 in rural areas. Additionally, the transport sector and fuel category saw a declining trend (-6.13pc) due to mainly a decline in petrol and diesel (-18.5pc) compared with October last year.

Iqbal directed that demand and stock availability analyses be proactively conducted for critical periods, especially during Eid-ul-Azha and Ramazan, to mitigate price spikes. He stressed that preparation for these high-demand seasons should anticipate potential supply pressures to prevent market disruptions. Local market committees were instructed to play an active role in monitoring demand and supply, ensuring adequate availability of essential commodities. Every deputy commissioner has been tasked with maintaining oversight of district-level stock levels to avert shortages. He also directed provincial chief secretaries to conduct regular price evaluations at the district level in collaboration with the PBS. He emphasised the need to avoid duplicated efforts by coordinating closely with PBS for data-driven decisions and effective price control.

With recent reductions in fuel prices, the planning minister underscored the importance of adjusting transport fares to reflect these decreases, ensuring the public benefits from reduced transportation costs across markets. The committee examined discrepancies between wholesale and retail prices in various regions, with a directive to establish a database for chief ministers’ review. This initiative aims to improve transparency, curb profiteering and bring greater stability to consumer prices at the local level. Iqbal highlighted the importance of a structured business plan for agriculture, urging the establishment of national production targets to align with domestic needs and export potential. Each crop should have a clear business model with annual targets, mirroring practices in developed countries.

Recognizing the need for specialized expertise, he recommended appointing a permanent agriculture economist to guide crop planning and economic projections. Furthermore, he called for enhancing value addition in dairy and agricultural products, particularly in high-potential items like milk, fish, mangoes and poultry, aiming to develop Pakistani brands for both domestic and international markets. Iqbal reiterated the critical role of data analytics in future planning. He urged all provincial and federal units to fully utilize PBS data, enabling informed decisions for price stability and productivity improvements across sectors. Efficient data usage, he noted, is essential to achieving economic resilience and supporting the public amidst inflationary challenges.