Talking to Business Recorder, PVMA Chairman Amjad Rasheed said that no decision had been taken to reduce the prices of ghee in the meeting with Minister for Industries and Production Jahangir Khan Tareen last week.
He said that ghee manufacturers have increased ghee prices by Rs 22 per kg from Rs 800 to Rs 1150 per 16 kg during the July-December 2006 period in the wake of price hike of palm oil products in the international market.
Heavy rains and floods struck the Malaysian palm cultivation regions, resulting in prices escalation of palm products, touching the highest level of $650 per ton in the last week of December, 2006, he said.
Shiakh said that now the prices of palm oil products have declined to $620 per ton but are still out of Pakistani manufacturers' range.
He said the prices of ghee in the local market are based at $450 per ton of palm oil products, while the prices in international market now stand at $620 per ton.
"We (manufacturers) will cut the prices of ghee by Rs 5-10 per kg when the prices of palm products will decline in the world market at least by $100," he added.
He pointed out that in the current scenario, cut in the prices of ghee is not possible in the face of Rs 20,000 per ton government tax on palm oil products import.
"Rs 9200 pre ton custom duty, Rs 6700 per ton sales tax, Rs 1700 per ton income tax and Rs 1000 per ton excise duty have been imposed by the government on import of palm oil products," he added.
He demanded that the government should link customs duty with the international prices of palm oil products and evolve a mechanism to assess and fix the customs duty in line with the international prices of the products.
He also demanded that the government should reduce customs duty on import of palm oil products by Rs 5000 per ton and fixed it at Rs 4200, till the prices decrease in the world market.
He linked reduction in ghee prices by Rs 5-10 per kg with reduction in customs duty. He said that PVMA would hold a meeting of the general body on Tuesday to resolve the prices issue and to keep the prices unchanged.
The Pakistan Vanaspati Manufacturers Association (PVMA) has suggested that the government should follow India-like formula for adjustment of import duty and fix cooking oil and ghee prices on import parity basis.
India-like formula will allow fluctuation in cooking oil and ghee prices as per international market rates of palm olien. It said the increase in the prices trend in vegetable ghee cooking oil continues as the international market of edible oil.
A PVMA statement said the official handout issued after the meeting between PVMA and the government created confusion among the public and the ghee manufacturers as if any agreement regarding cut in ghee/ cooking oil prices was reached.
It said: "No decision regarding cut in ghee/cooking oil prices was reached at any of the two meetings as the PVMA clearly stated its position and informed the minister and CBR chairman that relief would be possible to the consumers if the government cut down its duty on import of RBD palm olien.
The statement added that PVMA felt that the initiative for cut in ghee/cooking oil rests with the government to take the first step by lowing duties and taxes, totalling Rs 18.77/kg. They said the benefit proportionately to the cut in duty would go to the consumers.
It said: "The PVMA strongly feels that cut in duties and taxes is the only way to cut the price of this important kitchen item. The PVMA hopes that the first step will be taken by the government, failing which no reduction in the price of vegetable ghee/cooking oil is possible as the PVMA member units are operating on a very marginal profit, if at all, and there is no leverage with them to reduce the price of this very important kitchen item of daily use".
They said that PVMA member units were desperately trying to maintain the price of this important kitchen item as old stocks of edible oil were available and this situation does not exist any more.