Business Pakistan

Milk prices in Karachi becomes worse

KARACHI: The problem of rising milk rates in the city worsened after the associations engaged in the milk trade said they were prepared to bear any intervention to raise rates as they replied to the choice of Karachi Commissioner Iftikhar Shallwani to launch a crackdown on the hike.

The dairy farmers ‘ associations announced a per-liter rise in Rs10, which was approved by the Milk Retailer Association, raising the cost of milk in the city.

There are currently three dairy farmers ‘ associations providing milk to Karachi–the Dairy Farmer Association of Karachi, the Dairy Farmer Association, and the Karachi Dairy and Cattle Farmers Association. The three associations have collectively improved the wholesale rate of milk from Rs85 to Rs95 per litre, as a result of which the retail rate of milk is now Rs110 per litre, since the retail cost of milk must usually be about 10% higher than its wholesale cost.

The distributors had declined to recognize the enhanced rate of the dairy farmers in July and brought the issue to the Commissioner Office, which is liable for notifying the cost of milk.

In the second week of July, a meeting was held at the Commissioner Office in which all the associations involved in the milk trade were present. It was decided there that milk would continue to be sold at its previous price in the city until July 17, after which the price would be revised in accordance with the rate of inflation and the rise in the production cost of milk determined by the State Bank of Pakistan (SBP).

According to Amjad Ali of the Milk Retailers Association, no meeting has taken place since. “We had no option but to increase the milk price,” he said, adding it has been one month after the farmers increased the milk price but the retailers so far have not paid them according to their increased rates.

“Farmers have now threatened us with stopping milk supply,” he said, adding that if that happened, they would be able to get milk only from the open market, where the rate was Rs140 per litre. “We want the commissioner to listen to us and address our issues,” he added.

“The dairy farmers have already announced to supply their milk directly to the open market now,” Ali shared. He added in such a situation, the retailers association had no other option but to increase the price.

Responding to the threat of crackdown, Ali said if the Commissioner Office took any action, they would bring their animals on the roads and go on strike. Ali demanded that the commissioner share with them the new milk price determined by SBP.

Meanwhile, Cattle Farmers Association Chairperson Shakir Umer extended the association’s support to the retailers and said if the latter would go on strike, the farmers would join them. He lamented that the commissioner had no time to look into their issues. When the associations, according to him, tried to contact the Commissioner Office, they were told that Shallwani was busy in rain-related work in the city.

Umer recalled that the commissioner office had formally agreed on revising the milk price after a certain time period. Under an agreement between the milk associations and the Commissioner Office, the price of fresh milk was supposed to be revised after every four months, in accordance with the food inflation rate notified by the SBP.

It was April 1, 2018, when the price of milk was officially notified the last time. As per the agreement, the price had to be revised on August 8, 2018, which was not done. This agreement, Umer said, was also endorsed by the Sindh High Court in its March 3, 2018 order. He added that he had written some 13 letters to the commissioner to determine the new milk price as not doing that would be contempt of court.

Crackdown initiated

According to a press statement from the Commissioner Office, Shallwani directed all the deputy commissioners of the city to initiate a crackdown against the violation of the milk price fixed by the government.

The commissioner announced that milk price had not officially been raised and the official price of milk was still Rs94 per litre. The crackdown was to continue until the violators stopped charging the excess price for milk, the statement added.

In District East’s Gulshan-e-Iqbal area, action was taken against milk sellers flouting the government rate of milk. Mashallah Milk Shop in Gulshan-e-Iqbal, according to the statement, was fined Rs20,000 while a fine of Rs10,000 was imposed on Nagori Milk Shop. The shopkeeper of Bismillah Milk Shop was arrested for one day and fined Rs5,000.

In District Central, a total of Rs55,000 fine was imposed on 10 shopkeepers for violating the official price of milk..

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