As the Pakistani economy continues along its downward slope, the Business Recorder spoke to retailers and wholesalers at Karachi's Jodia Bazaar to see how the country's recent inflation has affected business. The traders and shopkeepers interviewed all shared a similarly gloomy assessment of the Pakistani economy and highlighted the manifold troubles shopkeepers are facing with increased prices.
Both retailers and wholesalers all remarked that their supplies are coming in at a much higher price, causing them to have to raise their own prices. Additionally, while the traders have maintained their customer base, many raised issues of customers coming less frequently or purchasing less. To compound their woes, the shops at Jodia Bazaar are also forced to close early on account of load shedding and experience frequent power outages through out the day.
Speaking to the Business Recorder, Khalid, a retailer in tea, powdered milk and lentils mentioned how wholesalers have raised their prices on his shop significantly, yet the official price list he receives carries outdated prices. Khalid stressed the need for better price control and checking, as he has also witnessed a slight dip in the quality of the goods he receives.
The retailer mentioned that prices of all his lentils have more than doubled, selling now for Rs 70 while they previously cost Rs 30. Prices of powdered milk and tea have also increased significantly, with a kilogram of powdered milk up from Rs 160 to Rs 280 and a kilogram of tea rising from Rs 220 to Rs 290.
Other retailers also shared their problems with price increases over the past few months. One of these retailers, Abdullah, said that a few months ago the price of sugar was Rs 25 a kilogram, while it now sells for Rs 32 - a significant rise for many of the nations poorest. Fewer people are buying sugar as a result of this increase, he added. While sugar can be cut out of meals if needed, the price of atta - an essential item for most of the nation - is up significantly as well. Ali Mohammed, another retailer, said in august 2007 atta sold for Rs 16 per kg, while its currently going for Rs 32. He concluded that, "this inflation is too high."
Another Jodia Bazaar shopkeeper suffering from these high prices is spices and dried fruits wholesaler Habib A. Karim. Speaking to the Business Recorder, he remarked that incomes are falling woefully short. He mentioned that previously his children's education could be covered by Rs 5000 but were now costing Rs 8000. In terms of business, his shop too is feeling the income pinch.
While previously able to employ 8-10 people at a rate of Rs 5000 each, Karim mentioned that an increase in the price of meals and transport have forced his shop to raise their workers wages, but also caused them to lay off workers they could no longer afford. Karim added that for educated people, there is not enough employment, forcing them to "hijack cars and steal phones.
" Karim's dry fruit and spices trade has also noticed a significant increase in their prices. Citing the doubling in the price of spices in the last year, Karim mentions how this is a global problem and many of his spices are imported from the US, Madagascar and China. In addition to higher prices, Karim is also feeling the affects of the drop in the value of the rupee, as his imports are paid for in US dollars.
While the supply of many of his goods is outside his control, his chilies and coriander are controlled by the local market. Karim says that on the local market, Sindh's landlords track supply and demand trends and accordingly hoards their produce. He also adds that unlike the Indian example of banning the export of rice, while the Pakistani economy is facing supply shocks the country "exports more and then availability [at home] suffers.
" The wholesaler further added that in terms of demand his customers have started facing problems selling these "luxury" items as well. He mentioned that while previously a customer could sell his goods and need replenishment in 15 days, it now takes twice as long. Karim was also critical of, what he termed, the current economic policy of "exporting the necessities of life and hoarding."
Others also shared this criticism of economic policies. One trader says that the abundance of goods was not a problem, but that "sowers, millers and smugglers store items and are either in Parliament or feudal lords." This trader, speaking to the Business Recorder on the condition of anonymity added that the "economy was artificially maneuvered by Shaukat Aziz," and added that he felt this was the reason for the current economic downturn.
Shopkeepers were equally critical of the current government, with one saying they had "deferred and delayed their mandate to reduce prices." Another wholesaler said that he was born and educated in the area, but that members of the middle class like him are suffering and have "lost all hope."
Also talking to the Business Recorder, the President of the Jodia Bazaar Traders Association (JBTA), Jaffer Khudia, discussed the problems shop-owners were facing due to current energy shortages. In addition to forcing the market to close early, he said that an increased price of electricity is also hitting people's costs of production hard.
Showing a shopkeepers electricity bill to the Business Recorder, he pointed out that in addition to the cost of energy, a duty, a fuel adjustment surcharge and an additional surcharge are all added onto the bill. Khudia also spoke of the hardship client's face as their budgets are constantly tightened. He said that on essential items, many try to defer their purchases or are forced to buy less than they need due to increased prices.
In terms of their predictions for the coming three months, all retailers and wholesalers were unanimous in thinking that the situation will get considerably worse. All said that prices would continue to increase in the near future, with many also predicting further troubles for businesses and law and order as people react to these price increases.
The JBTA President remarked that recently several traders have sold their shops and left the business no longer able to make ends meet. With troubled times predicted ahead for retailers and wholesalers, the future for consumers too look bleak.