10/25/2007 (The International News), Lahore - The prices of edible oils in international market have reached 30-year high with palm oil touching $915-$920 and soybean $955-$960 per tonne there is no chance of locally processed cooking oil and ghee rates coming down, industry representatives said Wednesday.

International edible oil rates have increased by 100 per cent from $425-$450 per tonne to current levels in a year.

The global price hike has affected the import dependent ghee and cooking oil industry forcing the manufacturers to increase price tags on all brands.

In March this year the price of 16 kilogram A-category tin was around Rs1,190 per 16 kg tin, which has reached Rs1,465 per tin. The price of B-Category 16 kg tin was Rs1,110 and C-Category tin was Rs1,090 which are now selling at Rs1,415 and Rs1,385 respectively. The price of A-category ghee has increased by Rs275 per tin, B-category Rs305 per tin and C-category by Rs290 per tin in last six months.

In July 2006 the price of branded and loose cooking oils was in the range of Rs55 to Rs63 per litre, which have now reached Rs88 to Rs103 per litre. The price of lose ghee and branded one kilogram polly bags has reached Rs92 to Rs105 per kg which was just Rs62 to Rs68 per kg in July 2006. The difference showed an increase of Rs33 to Rs40 per litre in cooking oils and Rs30 to Rs33 per kg for ghee.

Chairman, Pakistan Vanaspati Manufacturer’s Association (PVMA), Sheikh Amjad Rashid talking to The News said that upwards trend in global markets was the only reason of high prices in local markets. He said that profit margins of ghee manufacturers have not increased.

“The ghee manufacturers have only nine per cent margin in which they recover processing costs, transportation and marketing expenses while 91 per cent cost is of edible oil, taxes, duties, and sales tax,” he claimed.

He further said that the prices of edible oils and ghee would further increase, as the future rates of edible oils were much higher than the present. “On the other hand the price of locally produced oilseeds which were at Rs3,100 per 40 kg have reached Rs3,500 per 40 kg on arrival of new crop,” he said adding that the price of ghee would not decline in such scenario.

“At present the ghee manufactures are paying 15 percent sales tax, 3 per cent withholding tax and Rs10,000 per tonne custom duty that they shift to the consumers. Since the global edible oil rates had increased so the revenue generation of the government from this sector had also doubled,” he claimed.

“If the government would reduce the tax ratio the price of ghee could decrease locally,” he suggested.