LAHORE: As the minimum import duty has been enhanced to 3 per cent from 1 per cent, the prices of basic food items, including tea, pulses, tomatoes, onions and other vegetables would further go up in the days to come.
The government recently took taxation measures of Rs40 billion by imposing a 5 to 10 per cent regulatory duty (RD) on the import of 350 items, one per cent additional customs duty across the board on all tariff slabs, an increase in Federal Excise Duty (FED) and a raise in fixed duty on import of old and used vehicles from December 1, 2015.
The concept of minimum import duty was introduced in the budget of 2014-15. The initial rate was 1 per cent, which was raised to 2 per cent in the current budget. Now it has been enhanced to 3 per cent. Almost half of imports are covered by this duty. This includes the import of basic food items like pulses, tomatoes, onions and other vegetables, which is indeed oppressive taxation on the poor.
The other major source of revenue from the minimum duty is petroleum products. Following the decline in oil prices, not only have the GST rates on these products been raised substantially but also insidiously import duties have been levied. For example, inclusive of a regulatory duty, the import duty on furnace oil has been increased to 8 per cent and on HSD oil to 11 per cent.
The rate of gram pulse has already crossed Rs125 per kg against official rate of Rs98 per kg; ‘maash’ lentil is selling at Rs270 per kg against official rate of Rs194; ‘mash’ (unwashed) is selling at Rs225 per kg against official rate of Rs165; ‘masoor’ is selling at Rs215 per kg against official price of Rs145 per kg, ‘moong’ is selling at Rs165 per kg against per kg against official price of Rs119 per kg’ while gram (black as well as white) are being sold in the range of Rs115-120 versus government notified price of Rs98.
According to market sources, comparatively, the increase in masoor lentil price has been more modest, to Rs235 from Rs165 in the wholesale market. They said that absolute dependence on import, inadequate harvests owing to erratic weather and hoarding by middlemen, have sent pulses prices skyrocketing during last few weeks.
Other reason is that gram production has also dropped to around 50,000 tons against total consumption of 600,000 tons. Only 12,000 ton masoor was being produced against a consumption of 50,000 ton.
According to experts, global prices of pulses have gone up by about 40 percent during last three months due to fear of drought in India, the largest importer and consumer of the vegetarian source of protein. With Indian government’s announcement to import pulses, international prices have moved up drastically.
Pulses prices increased by 60 per cent in last one year in India and there is uncertainty about domestic production in 2015 due to threat of deficient monsoon. They said that gram prices in the forward trade in Australia have increased from $560/tonne to $785/tonne during last six months.
Similarly, prices of moong, masoor have increased by 30 percent in Myanmar and other supplying countries. Canada, the biggest grower of yellow peas too has increased area under the crop substantially, they added.
Experts said that rate of those veggies which are imported via Wagha will go up as the government has increased its minimum import duty. Regarding high prices of pulses, experts said that Pakistan has been depending on import of pulses like several other things. And presently, the international prices of lentils are on high trend.
News source: The Nation