The Competition Commission of Pakistan (CCP) on Thursday informed the National Price Monitoring Committee (NPMC) that the commission was chalking out a uniform formula for pricing of essential food items to remove price disparity among districts in consultation with the stakeholders.
A meeting of the NPMC was held with Finance secretary in the chair to discuss the prices of essential food and stock of supply of the essential items.
The CCP chairperson informed that they were holding a meeting in the second week of this month with all the stakeholders to discuss Food Laws and to develop a uniform formula for pricing to remove price disparity among districts.
Sources told Business Recorder that the CCP had made long-term and short-term recommendations to the federal as well as all the provincial governments to implement proposed uniform formula for price determination throughout the provinces to discourage suppliers from hoarding and delivering supplies to places where better prices and margins are available.
Under this formula, price controls on essential commodities as well as the food stuffs should be applied at the wholesale level, which can be monitored easily as compared to the vast retail sector, given the fact that wholesalers are located in mandis (markets) and have relatively uniform operating cost.
Rather than recommending a single price for one commodity, it is recommended that the price determinations be made with reference to quality of commodities through range/band of prices.
Basic quality standards should be identified i.e. the minimum range/band in the price would be for average quality and the maximum range/band could be for higher quality, suggests the formula, sources added.
One of the most important recommendations of the CCP was to urge the provincial governments to update and consolidate the laws relating to essential commodities, food stuff, agriculture produce markets, and godowns' registration into a single legislation and the establishment of a single authority at the provincial level to deal with the issues of hoarding and price hike of essential food items.
Although the prices should be determined through normal market mechanism i.e. supply and demand, however, the CCP, while keeping in view the welfare of consumers, has recommended that the new consolidated law should provide for a uniform formula for price determination throughout the province.
This will discourage suppliers from hoarding and delivering supplies to places where better prices and margins are available.
Further, the price control mechanism should only be enforced in cases of emergency or shortages.
The chair emphasised that the provincial government should play a proactive role in checking hoarding and undue profiteering to ensure smooth supply of essential food items at reasonable prices.
The meeting discussed the trend of Consumer Price Index (CPI), which is a headline measure of inflation.
It has been observed that prices of food items such as pulses, fresh vegetables and wheat, which have been the main top drivers of inflation, saw a downward trend on the monthly basis.
The meeting was informed that the CPI inflation decreased by 1.0 percent on MoM in February 2020 over January 2020.
However on YoY, recorded at 12.4 percent in February 2020 over February 2019 and July-February CPI inflation on YoY reached 11.7 percent (6.0 percent last year).
It was stated by the secretary Finance that the government was committed to reducing inflation and more steps were underway in the coming months.
It was noticed that Sensitive Price Indicator (SPI), which monitors the price movement of 51 essential items on weekly basis recorded a decrease of 1.16 percent for the week ended on 27th February, 2020.
During the week, 13 items recorded decline in their prices, while 25 items remained stable.
This was the third consecutive decline in the SPI during the month of February 2020.
The committee also discussed the price movements of these items among the provinces/ICT and observed variations in price level.
The provincial governments also informed that they are proactively monitoring the prices as well as supply of essential food items.
Price trend in international market are on a declining trend, which would augur well for domestic prices in the near future.
The meeting also discussed the outbreak of novel coronavirus and its impact on demand and supply of essential items.
The chair advised that all relevant authorities along with provincial governments should in close coordination monitor the provision of essential food items at affordable prices keeping in view the forthcoming Ramzan.
He further stressed a check on undue profit margin that exists between the wholesale and the retail level, which should be prevented.
This correspondent repeatedly tried to contact and sent messages to Omar Hameed Khan, spokesperson of the Finance Ministry for his comments, but the official did not respond till filing of this report.
Secretary Ministry of National Food Security and Research Mohammad Hashim Popalzai told Business Recorder that he was busy in some other meeting and could not attend the NPMC meeting.
The meeting held at the Finance Division was attended by the representatives from the provincial governments, Islamabad Capital Territory, ministries of Industries, Interior, Law and Justice and Human Rights, Planning, Development and Special Initiatives, National Food Security and Research, Federal Board of Revenue, the CCP, the Pakistan Bureau of Statistics, and the Utility Stores Corporation.
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