Roadside vendors selling cheaper ghee, rice

[Naveed Yaseen]

By Aamir Shafaat Khan
KARACHI, Nov 8: After steep fall in prices ghee and rice are being sold on pushcarts near the City Court in Karachi, a rare phenomenon perhaps seen for the first time in the metropolitan.

The pushcart vendors are demanding Rs90 for one kg ghee pouch, while the loose ghee of some known companies in retail markets is selling at Rs100 per kg.

However, after the price cuts made by various companies (including branded ones), the rate of branded ghee in pouch ranges between Rs130-135.

Many price conscious consumers, having cash problems, do not mind purchasing the Rs90 per kg pouch without any concerns for quality. However, the sellers of the low cost ghee have been giving assurances to the purchasers about its good quality.

Meanwhile, the price of 16 kg ghee tin further fell to Rs1,430 from Rs1,500 some 15 days back. In September, it was quoted at Rs1,780 and Rs1,820. In late July it was selling at Rs1,900.

When Farid Qureishi, the general secretary Karachi Retail Grocers Group (KRGG) was asked as how the retailers are selling ghee at Rs90 per kg, he claimed that the consumers were taking risk by purchasing the low cost ghee at roadside.

He thought that these roadside retailers were not going to stay for a longer period. In case a customer complains about quality, how these retailers would explain as they are selling the items in a hit-and-run market?

In a sharp contrast, genuine retailers in various markets are bound to listen to consumers’ grievances regarding quality of ghee and even they will replace the commodity with a quality one.

He urged the government to check the quality of ghee being sold by the push cart owners.

There are three kinds of ghee products available in the markets. One is produced by branded companies and the second quality is produced by some good companies. The third quality is made either through direct filling of palm olien in the 16-kg ghee tins without undergoing the refining process. Besides, the makers of the low cost ghee also use substandard quality packing material, while branded companies and others use the food grade plastic. The customers cannot identify the difference as the colour of un-refined palm olien is same as of refined ghee, Farid said.

Some pushcarts and stall owners in Jodia Bazaar are also offering basmati rice at Rs50 per kg as compared to Rs60 per kg sold in September.

It may be noted that these rice sellers are deceiving the customers either by selling a different variety than basmati and super basmati or blending them with low-quality rice. Many of them are offering rice 386 under the name of super basmati.

It has been observed that except for one or two shops in the wholesale markets of Jodia Bazar, the majority of the wholesalers mixed various quantities to sell them as high-quality basmati rice. Even the retailers in the markets sell blended rice varieties and charge the price of high quality rice.

Regarding ghee prices, many customers believe that companies have passed on a fraction of the impact of falling palm olien rates to the customers and there should be more price cut in future. The local rate of palm oil has further fallen to Rs2,600 from Rs2,900 per maund (37.25 kg) in October. In September it was selling at Rs3,600, while three months back it was priced at Rs4,200. The price of canola has come down to Rs2,500 per maund from Rs3,900 a month back.

Dalda Foods Private Limited has slashed the 5-litre and 2.5-litre cooking oil tins to Rs725 and Rs375 as compared to Rs785 and Rs390. The 5-kg and 2.5- kg ghee tins are now sold at Rs695 and Rs355 as compared to Rs775 and Rs395.

The pack of five kg ghee (one kg pouch each) is being sold at Rs665 as compared to Rs765, while the pack of five kg cooking oil (one kg pouch) will be priced at Rs710 as compared to Rs775.

When asked whether the ghee price would come down further after more drop in prices of palm olien, a leading packer said that much depends on the dollar-rupee parity in the next two to three weeks. Much also depends on the IMF package as its impact will be felt on dollar’s rate.

He added that the ghee and cooking oil prices had been reduced despite the fact that shipments of palm olien waiting for clearance at the port had been purchased at $1,200 per ton. The customs duty on these Malaysian shipments had been paid at Rs8,200 per ton, while the duty on Indonesian palm olien is Rs9,100 per ton. There is still a vast difference in the rupee dollar parity, which now stands at Rs82 to a dollar as compared to Rs62 a dollar earlier this year.

He said that the roadside shopkeepers are selling number three quality of ghee and that is why they are offering very low prices.

The country’s annual consumption stands at 3.2 million tons in which the oil share ranges between 35-40 per cent and that of ghee at 65-70 per cent, respectively.

http://www.dawn.com/2008/11/09/ebr3.htm