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Millat Tractors to increase prices
Sunday, August-29-2004

LAHORE (August 29 2004): The Millat Tractors, the local manufactures of Massey Ferguson tractors, have decided to increase the selling prices of tractors in view of the escalating cost of production.

The company has been selling tractors at a loss for quite some time due to different cost escalating factors, a spokesman for the Millat Tractors said, adding it seems to be in a dilemma where on one hand they want to support the government drive to promote agriculture while on the other, they are not in a position to hold prices.

The prices of Massey Ferguson tractors were last fixed in middle of 2002. The CKD imports are in pound sterling, and since in middle-2002 the pound-rupee parity has moved from Rs 90 to present value of Rs 108. Moreover, the Steel Mills has also increased raw material prices as much as 50 percent during the said period.

Similarly, raise in utility charges and wages, etceteras have further added to the cost of production. Taking into account all the said factors and in view of huge accumulated losses during the last few months, the company is unable to hold the prices at the existing levels any more, he pointed out.

The spokesman said it is interesting that the Pakistan Steel is a public sector enterprise, and the government allowed the unit to substantially increase in raw material prices, adversely affecting the down stream industry, adding the company has been absorbing cost escalations since June 2002.

In view of the cost factors beyond the control of the company like pound sterling escalation and raw material prices increased up to 50 percent by the state-controlled Pakistan Steel Mills, it has become imperative to review the tractor selling prices, he argued.

Courtesy Business Recorder
 

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