Price hike during Ramazan

Consumer Rights Commission of Pakistan (CRCP) conducts a weekly analysis to observe the trends in price hike in food items in various local markets of Islamabad.

Date: July 25, 2014

Published in Pakistan Observer on July 25, 2014

Like previous years, on the eve of this Ramazan, local administration of Islamabad established 22 price control committees under the supervision of magistrates for respective police stations to regulate and control the prices of items of daily use in the market. On June 27, 2014, under Section-3 of Food Stuffs Control Act 1958, District Magistrate Islamabad also fixed the retail prices of essential food items to provide relief to the consumers. As per government notification the price of Mutton was fixed at Rs.630 per kg for urban area, Rs.600 (kg) for rural area and Beef (with bone) was fixed at Rs.280 (kg) for urban and rural areas. Daal Chana (Bareek) was fixed at Rs.62, Daal Chana (Moti) Rs.70, DaalMoong Bareek Rs.130, Daal Moong Moti Rs.170, Daal Mash (Kurram) Rs.140, Daal Masoor Rs.110 and Basin at Rs.70 per kg. Government also fixed the price of Samosa (dozen) at Rs.156, Pikora (kg) at Rs.190, Jullebi (kg) Rs.200, Milk (Fresh) Rs.80 per litre and Yogurt (Dahi) at Rs.90 per kg. However, these prices are seldom observed in the market.

Consumer Rights Commission of Pakistan (CRCP) conducts a weekly analysis to observe the trends in price hike in food items in various local markets of Islamabad. During the last three weeks, the analysis shows upward trends in price of eatable items, especially vegetables and fruits. It is not for the first time that during the month of Ramazan, one sees a considerable hike in prices of essential food items in the markets where consumers being weak and disorganized stakeholder of market, suffer more and burden is always shifted to them as compared to whole-salers and retailers. It is unfortunate that while prices are significantly reduced in the western world on sacred and festive occasions like Christmas and Easter, in Muslim world in general and Pakistan in particular, the prices of food items go upward especially in Ramazan and thus add to the worries of the consumers.

Being a fundamental stakeholder of market, a consumer has right to access to quality daily commodities at affordable prices. Whereas, government authorities are responsible to ensure the availability, quality and affordability of essential food items in the markets for consumers.

Currently, Islamabad Capital Territory (ICT) and all the Provinces (except for Sindh) have their respective consumer protection laws and a defined mechanism of price control and monitoring by price control committees headed by magistrates (Assistant commissioners). These committees carry out daily price checking and ensure the quality of food items. Under the respective consumer laws, magistrates have powers to impose penalties and also imprison on the acts of profiteering, black-marketing, hoarding, adulteration, selling of expired items of food and other items unfit for human consumption or charging for goods and services in excess of price fixed by the authority etc.

Despite the presence of consumer protection laws and price control mechanisms, the overall trend in price increase has continued. This shows the inability of government to enforce price issued lists of daily use items in the main markets and weekly bazaars. It is observed that almost all essential items for sale, including fruit and vegetables are being sold at substantially higher rates compared to those fixed by the government on June 27, 2014. According to government rate list the prices of fresh milk, yoghurt, tomatoes, potatoes, radish, apples (China) and mango (Sindhri) have been fixed at Rs.80, Rs.90, Rs.25, Rs.68, Rs.23, Rs.160, and Rs.72 per kg respectively, but they are being sold at Rs.90, Rs.100, Rs.50, Rs.80, Rs.60, Rs.250, and Rs.150 in different markets of Islamabad. Similarly, prices of Indian bananas have been fixed at Rs.157 per dozen but it is being sold at Rs.250 in the retail markets. Government has also tried to provide commodities at subsidized rates in Utility Stores and Sasta Ramazan Bazaars where limited food items are available. Being in limited numbers, Utility Stores and Sasta Ramazan Bazaars are no exception anymore to provide relief to consumers. It has been observed that even though the rate list was being followed at these bazaars, the quality of items is being compromised. Often it has been observed that many essential items are short in supply in these make shift arrangements by the government. Fruit and vegetables of inferior quality were being sold in the Sasta Bazaars and hence, this temporary arrangement is not providing any relief to consumers.

There are many reasons of price hike in the country especially during Ramazan. One key reason is imbalance between supply and demand of commodities in open market. It is observed that during Ramazan the demand of various food items increases enormously which ultimately disturbs the supply chain of goods. Other reason is hoarding and black-marketing for extra profiting by the wholesalers and retailers. They start hoarding various commodities two to three months before Ramazan. In this way they are able to make big profit by selling these items in Ramazan on much higher rates. Hence, high rates at wholesale markets force retailers to raise prices. Actually both wholesalers and retailers at their end are not following the official rate lists and selling essential items at higher prices in the markets. Lastly, price control committees are weak, inefficient and do not follow the mandate in order to implement the prices as determined by the government. Being dominated by trader associations and unaware of consumer protection laws, these committees do not tend to think about the interests of consumers and at times hold the interests of the wholesalers. They regularly target small shopkeepers not wholesalers which least helps the consumers in any respect to control the prices in the market.

In Pakistan, consumers are the most neglected stake holder of the society where no one wants to take the responsibility to protect their interests. To safeguard consumers’ interest, government needs to look into following suggestions: firstly, there is a need to take appropriate administrative step along with monetary and fiscal policies like monitoring of prices and supply situation in the country to control the inflation rate. Although officials issue rate lists, visit markets and impose fines on shopkeepers yet they are unable to control the prices.

It is suggested that they should also visit regularly the vegetable and fruit markets in the morning at the time of auction to control the prices in the wholesale market. Secondly, price control committees should play their effective role for the implementation of control lists in the market. They should also target wholesalers along with retailers. Civil Society Organizations (CSOs) who understand the consumer perspective should be made integral part of these committees. Thirdly, government rates do not match ground realities as wholesalers and vendors sell those items at increased rates, therefore, it is suggested that authorities should consult all stakeholders before finalizing prices. Fourthly, district government should take the advantage of media and start awareness campaign for the general public through radio, TV announcements, advertisements, mobile SMS, email alerts and share complaint help-lines established by the government to control prices of daily commodities. Fifthly, while demonstrating the collective consciousness, consumers must ask for rate list of daily commodities and lodged complaints to concerned authorities in case rates are not implemented. To create awareness among the consumers about their rights, CSOs role is crucial. Sixthly, the Federal government should make strategy to control the prices of daily needs items with the support of Provincial governments and other stakeholders so that cartels, profiteers, and hoarders are not allowed to make undue profit and provide some relief to consumers especially in the holy month of Ramazan.