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With Ramazan around the corner, things are not looking very promising for consumers. The onset of the holy month is usually accompanied by deep-fried samosays and jalebis, and chicken cutlets all around, which causes an annual spike in food prices. But what is most concerning this year is that prices have started rising before the month has even begun.
Let’s start with chicken. Poultry prices have been surging in recent weeks due to the spread of LSD in livestock. No, not that LSD – this is lumpy skin disease, a viral disease that spreads rapidly amongst cattle. While health experts have clarified that the disease poses no threat to human beings, people are still wary, and as a result have shifted towards buying more poultry. According to the Pakistan Bureau of Statistics, this has led to chicken prices rising by 75% in cities in the last six weeks.
Meanwhile the price of branded ghee and cooking oil is also nearing PKR 500 per litre/kg in many markets, as a depreciating rupee and soaring palm oil rates in the international market have forced up the price of this cooking staple. The government this week announced a 10% tax cut on the import of palm oil for the months of April and May, but sellers have derided the move as too little too late.
To make matters worse, Ramazan inflation is also likely to hit consumers soon, meaning that prices are only set to rise in the coming weeks.
KSE-100 rose slightly this week, as the Ministry of Finance revealed that ongoing negotiations with the IMF are continuing as planned. PKR depreciated again this week to record lows, as the surge in global energy and commodities prices continues to exert pressure on the current account deficit. Local gold prices also fell this week.
The annual change in Sensitive Price Index rose to 15.67% vs. 15.12% last week. The poorest of the country (Q1) experienced a change of 13.22% vs. 16.58% for Q5. On a weekly basis, prices rose for all quintiles by 1.10%.
Increase in prices of Chicken (+8.47%) and Cooking Oil (+2.55%) contributed to weekly inflation. A fall in the price of Garlic (-4.94%) and Eggs (-4.13%) helped moderate inflation this week.
What Else We’re Reading (Local)
- After remaining closed for over two years, the Khunjerab border, Pakistan and China’s only land crossing, is finally reopening on April 1, 2022. (Profit)
- Online marketplace Alibaba.com has more than 3,000 Pakistani sellers, a number that has grown rapidly in recent years, with nearly 90% of them hailing from Sialkot. (Dawn)
What Else We’re Reading (International)
- China’s economy is facing possibly the worst slowdown since the pandemic, with Covid-19 outbreaks disrupting production, and a property sector that remains to decline. (Bloomberg)
- The BJP swept to a resounding victory in Uttar Pradesh, India’s most populous state, setting the stage for Narendra Modi’s re-election as Prime Minister in 2024. (WSJ)
