Chicken, wheat flour prices push SPI up 1.09pc

KARACHI: Surge in the prices of chicken, rice and wheat flour pushed weekly inflation up 1.09 percent during the seven-day period ended January 5.

Annualised inflation increased 30.60 percent, increasing the worries of low and middle income groups, who might soon lose their spending capacity for even essential commodities.

Pakistan Bureau of Statistics (PBS) data issued on Friday attributed the WoW increase in sensitive price indicator (SPI) to rise in the prices of chicken (16.09 percent), broken rice basmati (5.16 percent), wheat flour (4.87 percent), rice irri-6/9 (3.45 percent), bananas (2.97 percent), onions (2.65 percent), bread (1.24 percent), salt powdered (1.07 percent) and pulse moong (1.02 percent).

On the other hand decrease was observed in the prices of potatoes (4.61 percent), eggs (1.31 percent), tomatoes (1.17 percent), LPG (0.85 percent), vegetable ghee 2.5kg (0.71 percent), cooking oil 5 litre (0.32 percent), sugar (0.24 percent), vegetable ghee 1kg (0.11 percent) and pulse masoor (0.05 percent).

Fahad Rauf, head of research at Ismail Iqbal Securities, said SPI increased mainly due to increase in chicken and wheat prices.

Chicken price has been increasing due to a shortage of soybean feed, whereas the price of wheat was on the higher side because of support price disparity between Sindh and Punjab, which also resulted in a shortage of the grain at wheat flour mills.

“We estimate January 2023 CPI (consumer price index) at 27 percent vs 24.5 percent in December 2022. We have assumed further Rs100/kg increase in chicken prices,” Rauf noted.

The price of a 20kg wheat flour bag has been on an upwards trajectory since the week-ended November 24, 2022 when it was Rs1,509.83/bag. In the weeks since that, 20kg wheat flour price has jumped up by Rs187.79/20kg bag on average to stand at Rs1,697.62/bag.

During the same week last year, the price was Rs1,167.96/20kg bag as per PBS data. This shows that the average price of a wheat flour bag weighing 20kg has increased by Rs529.66 for consumers. On year-on-year basis, this shows a 45.35 percent hike in the price of the essential commodity.

Sameen, a house worker, who buys 10kg of fine quality wheat flour every week, said that it was becoming impossible to make ends meet for her five-member family. “Juggling between my power bill and the cost of basic commodities like wheat flour, rice and vegetables is becoming increasingly impossible,” she lamented, pointing out that she has not “dared to buy chicken” for more than two weeks now.

PBS data attributes different weightages to the commodities in the SPI basket. For the group with the lowest spending capacity, wheat flour holds a weightage of 6.1372 percent, whereas for the combined group the weightage stands at 3.9725 percent.

Other commodities with the highest weights for the lowest quintile include milk (17.5449 percent), electricity (8.3627 percent), sugar (5.1148 percent), firewood (5.0183 percent), long cloth (4.2221 percent), and vegetable ghee (3.2833 percent).

Among these, prices of milk and firewood increased; sugar and vegetable ghee declined, whereas the price of electricity and long cloth remained the same.

For the groups spending up to Rs17,732; Rs17,733-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175; YoY SPI increased 29.60, 30.06, 31.88, 32.92, and 30.59 percent, respectively.

SPI was recorded at 219.56 points against 217.20 points registered last week and 168.12 points recorded during the week ended January 1, 2022.