16/7/07 (The News) - KARACHI: The local ghee and cooking oil manufacturers are still not willing to revise the prices of their products downwards despite a substantial fall during the last 15 days in palm oil prices in the international market.

Contrary to this, in the case of increase in prices of palm oil ñ the major raw material in producing ghee and cooking oil - the manufacturers do not wait a single minute to pass on the burden of extra cost to local consumers.

During the last one month, ghee manufacturing companies increased the prices of ghee and cooking oil three times. A 16kg tin of ghee and cooking oil is the best barometer to gauge the instant price fluctuations in the commodities, which are largely consumed by hotels, confectionaries, sweet makers, small vendors of oily food, etc.

However, the poor segments of the society, which could not afford the costly branded products, prefer to buy loose ghee or cooking oil in small quantities ranging from a quarter to one kg. During January to February 2007, the 16kg tin of ghee and cooking oil was being sold at Rs1,000, which rose to Rs1,050 during March-April.

The ghee manufacturers further raised prices of 16kg tin to Rs1,260 in May and the price inched up to Rs1,270 in June this year. Now, ghee is being sold at Rs1,300 in the wholesale market.

Consumers purchase loose ghee or cooking oil at Rs82 per kg while branded products of different companies are being sold in the range of Rs90 to Rs99 in the local market.

A market survey revealed that one kg pack of Dalda was priced at Rs97, Sufi at Rs91, Habib Rs96, Soya Supreme Rs96, Kissan Rs99 and Meezan Rs99. There are some substandard ghee manufacturing factories, mostly located in the Korangi Industrial Area, which are selling unprocessed palm oil in slum areas at lower prices, ranging between Rs75 and Rs77 per kg.

A majority of small hotels use this unprocessed palm oil in their dishes which is not fit for human consumption. Most of their customers are labourers or those belonging to low-income groups.

For the last 15 days, Malaysian crude palm oil prices have been continuously falling. The benchmark October futures contract on the Bursa Malaysia Derivatives Exchange fell by 38 ringgit to 2,544 ringgit or $739 per tonne due to pressure from rival soybean oil which fell on weak exports.

Malaysian palm oil takes cue from the US soyoil market because both commodities are used in similar products ranging from cosmetics to biofuel.