Imported Nutella, cereal, fries, cheese running out in Karachi
KARACHI: Been to your supermarket recently and not found your favorite nutella spread? You are not alone. Many consumers have told that they were unable to find imported food items such as cereals, cheese, fries and their favorite chocolates because stores across Karachi are short of these imported items. Amarket survey indicates some stores may run out of these stocks soon if the dollar rises further.
Suppliers (traders) of imported food have not been able to buy in bulk because of higher duties and a steep surge in the dollar price that has jolted their financial position. This is what emerged in background interviews with industry sources, people involved in the supply chain, importers and management staff of supermarkets. In fact, some small suppliers have gone out of business recently and the import of these items at some stores, such as Imtiaz Super Market (ISM), the largest in the city, has been disturbed.
“Everything [imported food] from A to Z has become expensive and is in short supply,” a staffer from ISM said. That includes juices, drinks, chocolates, cheese and cereals etc., he said. “Our imports are disturbed and this has been going on for three months.”
He said some of these items are still available because some shipments were cleared recently. But, he added that the supplies will stay uneven if the dollar remains at the same level and the situation may worsen if the dollar increases further.
“Duties for some items have more than doubled while the dollar appreciation has had a big impact as well, making these items very expensive to import in bulk. Not everyone has this much cash in hand,” he said.
In mid-October the government had increased import duties on 570 food items, including but not limited to milk and cream
(25%), whey powder (25%), cheese (50%), chocolate
(30%), and fruit juices
(60%). On the other hand, the dollar rose sharply, moving from Rs128 when the new government came in power to Rs139 as of Thursday. This made bulk imports more expensive for traders. For ISM, grocery accounts for 25% of the imported items they sell.
“There is a big supply and demand gap in the market because of higher duties and a stronger dollar,” said an industry source with vast experience in supply chain management. Explaining the shortage, he said these grocery stores used to have three months of imports as buffer stock to fill in this gap and maintain supply all the time. However, that buffer is not there anymore.