High commodity prices | Pakistan Today

High commodity prices

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Despite an international fall in commodity prices, consumers across the country still have to pay higher prices. When the Coronavirus pandemic arrived in Pakistan the possibility of a lockdown induced a buying frenzy, which created shortages. Once the lockdown was put in place the timings for wholesale and retail stores to remain open were shortened, leading to an increased volume of customers during the allotted timeframe to avoid lockdown violations. Logistical disruptions have broken some supply chains as well, resulting in shortages. These price hikes are despite a drop in international prices of imported staple foods such as pulses, palm oil and tea, indicating domestic problems that are making essentials expensive. Before the Coronavirus started spreading there was a drop in inflation that even led to an initial cut in the interest rates. This was quickly followed by a 30 per cent drop in international oil prices that lead to a Rs 20 drop in petrol and diesel prices in the country. But still, prices remain stringent, unmoved by significant drops in input costs. It is likely that the full benefit of the fuel cost reduction and the general level of inflation has been mitigated by the fall in the value of the rupee against the dollar, which has depreciated close to 10 per cent in the past week alone whereas further volatility suggests that this trend could continue.

These are serious challenges that the federal government has to address in order to ease the suffering of the masses facing this unprecedented once-in-a-generation pandemic. Although it has removed or lessened taxes on some of the more essential items, this has failed to arrest the rise in prices. There is a likelihood that certain wholesalers are either creating artificial shortages by hoarding goods or have widened their margins to make the most of this crisis. Such profiteers, as PM Imran Khan has stated, will be dealt with swiftly by the state. One therefore hopes a thorough investigation is made into the ongoing pricing crisis soon, so that any unexplainable artificial price upticks are identified and corrected.