Ghee price shoots up by Rs 57 per 5kg

Ghee price has shot up by Rs 57 per 5-kg tin in the retail market to Rs 625 per 5 kg tin despite a decline in the world palm oil prices by $30 a ton, market sources said on Monday.With the recent increase, the 2-1/2 kg ghee tin has become costlier by Rs 28.
It was earlier being retailed at Rs 292, which has now reached Rs 320, retailers said and added that "ghee per kg price rose by Rs 11 to Rs 123 in the retail market, which was previously available at Rs 112." Retailers held the recent ghee price increase illogical by the manufacturers aimed to multiply profit. "We see no solid reason behind price escalation of the commodity at present," they said.
The world palm oil, according to importers, had declined to $1,080 per ton from $1,110 per ton. Despite a slump of $30 a ton in palm oil, increase in the ghee price was inevitable to take place in the local market, they added.
When contacted, the ghee manufacturer, Shaikh Rafique told Business Recorder that palm oil international market had touched the $1,100 a ton level, which primarily brought about ghee price increase in the local market. "Only a month ago, palm oil price has gone up by $120 per ton in the world market and its impact on ghee production has now been witnessed and consequently rise in ghee price took place in the local market," he said.
The palm oil price in the local market is still lower than the world price, which is being sold at Rs 3,280 per 37.324 kg whereas its international market price is Rs 3,450, he said. Rafique maintained that speculative buying and hoarding of the commodity in the world market was the major driving force behind its price escalation. He however said that ghee price increase was not higher rather it should be in line with the world market prices of palm oil.
Consumers will not resist this increase, as it is normal, he was of the view and added that ghee was still inexpensive while wheat flour had hit the market badly. He said that the government was not giving subsidy on ghee to provide the commodity on lower rates despite world price increase.
Total ghee consumption in the country stands at 2.7 million tons, of which 0.9 million tons is locally produced (0.5 million tons from corn and 0.4 million tons from cottonseed), while the rest is imported from the world markets, he added.