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Be ready for rise of prices on smokes

Published on April 7th, 2008 19:04

A Pakistan a local source of information announced that country may face an increase in prices for cigarettes by 10 percent due to recent changes that has boomed the state.

Increase of price for electricity and oil has affected the entire tobacco producing. Pakistan traders are hoarding tobacco products in order to met probable increase of prices.

Moreover, some tobacco providers begin to limit supply of some brands in the market as when the prices would soar they earn a lot of money as balance in price.

Local tobacco companies have stopped to carry some brand, perhaps of the same reason, albeit company representatives said they shorted the limit of products because of different reasons. Gap in tobacco industry has yielded because of increase of demand, raise of prices on oil and electricity and lack of tobacco.

This situation becomes very interesting and curious to observe, because across the country there are more than 60 tobacco companies. Two important Pakistan tobacco companies, Pakistan Tobaco Company (PTC) and Lekson Tobacco Company, have already shorted their major brands Gold Leaf and Morven in the market. A representative of PTC said that even company is constrained to limit the amount of their products in order to face the continuous increasing demand they don't plan to increase the prices for cigarettes, at least formally.

"It is true that there was a shortage of brands due to the multiple effects on the production side but company has not made any decision to raise the prices," he said.