Milk now at Rs 60/litre

KARACHI – Employing the rationale that milk sellers’ arbitrary increase of more than 20 rupees in dairy products’ prices was neither logical nor reasonable, the City District Government Karachi (CDGK) on Monday fixed the per litre price of milk at Rs 60 with immediate effect.
A meeting between various stakeholders was convened at Civic Centre, the seat of the CDGK, on Monday to deliberate the issue. Interestingly, a large number of milk sellers’ representatives chose not to attend, sources told Pakistan Today. Those who did, however, insisted that milk prices be increased by 15 to 20 rupees per litre as the cost of production had risen due to petrol price hike and other factors.
Sources told Pakistan Today that the per litre cost of producing milk was still Rs 50 per litre, Rs54 for wholesalers and Rs59 for retailers. As things stand, the profit margin for every litre sold is Rs5 but an increase of 15 to 20 rupees is only meant to augment returns.
Given the situation, the only concession allowed to milk sellers was that the city government approved a one-rupee increase in the per litre price of Rs 59, that had been fixed as recently as December 2010. Milk sellers were “convinced” by Karachi Administrator Fazlur Rehman that only a one-rupee increase could be justified in lieu of the recent hike in petroleum products.
Rehman contended that production cost calculated by dairy farmers was much higher than the actual cost, and therefore, it was not possible to increase milk prices by more than a rupee per litre. He further argued that milk prices were increased as recently as December 2010, and the price was to stay at that level for a year, but another hike just three months later was not reasonable.
Citizens’ representatives argued that government inaction was squeezing consumers thin, and urged the CDGK not to saddle citizens with such an enormous burden. Consumer Rights Council chief Ahmed Chinoy said that citizens of Karachi had begun feeling that the government was not taking any action against the hike in milk prices, and that milk sellers were allowed to make a 10 to 20 rupees profit on every litre they sold. Consumers Forum Chairperson Huma Bukhari said that milk prices in Karachi had been increase by nearly 300 times in only five years.
Following the meeting, Administrator Rehman urged citizens to refrain from buying milk at prices above than the rates fixed by the government. Besides the strategy set up by the CDGK to take action against milk hoarders, he said, people should also stop buying fresh milk for a couple of days to force milk sellers to adhere to government regulations.
“This time, action against milk hoarders will not be limited to retailers, but will be extended to the supply line of fresh milk, as they are considered to be the main hoarders in the city,” Rehman said.
Meanwhile, sources argued that despite the claims of the administrator, the CDGK is still lacking a comprehensive mechanism to control the prices of fresh milk. The absence of complete administrative control in the market also meant that not only were the prices being increased by the day, but the quality of milk was also deteriorating. “On the excuse of keeping milk fresh, profiteers extensively use ice but that in turn increases water content in milk,” they said.