Manufacturers of branded ghee and cooking oil have raised prices despite a decrease in the cost of imported palm oil.
According to a retailer, the price of branded ghee and cooking oil has increased by Rs. 80 per kg/litre, bringing the price to Rs. 570. In some cases, prices for major brands have gone up by as much as Rs. 100 per kg/litre, as reported by a national daily.
Explaining the price hike, Pakistan Vanaspati Manufacturers Association (PVMA) Chairman Sheikh Umer Rehan noted that global palm oil prices, which had previously risen to $1,285 per tonne, have now dropped to $1,185 per tonne. This reduction has brought the local market price of palm oil down to Rs. 16,500 per maund from Rs. 19,000.
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As a result, smaller and medium-sized manufacturers, who dominate the market, have lowered ghee and cooking oil prices by Rs. 40 per kg/litre after the earlier Rs. 80 increase. However, branded products, which account for only 5% of the market, have yet to adjust their prices.
Rehan explained that branded manufacturers take longer to reflect price changes due to their extensive processes of printing, distribution, and marketing. He assured that prices for branded products will gradually decrease.
Pakistan relies heavily on palm oil imports, with 90% sourced from Indonesia and 10% from Malaysia. The country consumes around five million tonnes of ghee and cooking oil annually, requiring 3.5 million tonnes of palm oil imports.
During the first five months of FY24, Pakistan imported 1.319 million tonnes of palm oil worth $1.26 billion, compared to 1.248 million tonnes worth $1.17 billion in the same period last year. The average price per tonne rose slightly to $954 from $941.
