Every Ramazan, like clockwork, the markets begin to change their rhythm. The footpaths thicken with shoppers, as fruit stalls glow brighter, stacked high with bananas, apples and other seasonal fruits. The vegetable sellers speak faster, not because they want to deceive you, but because there are simply too many customers and too little time.

This isn’t an anomaly, this is seasonality. The patterns repeat every year and disposable income keeps shrinking further.

Over the last six years, prices across the board have increased by more than 111 percent, while prices of a broad-based basket of food has increased by 116 percent. Effectively, prices have more than doubled in many cases and remain around that range. Despite the run-up, a price bump is also a regular occurrence. When you track food prices week-by-week and month-by-month, you see a recurring ‘Ramazan Premium’, a step-up in prices that arrives with remarkable regularity.

It does not hit every item equally. It concentrates in the foods people buy more of during the month: vegetables, fruits and proteins. It is sharpest where the supply chain is weakest: perishables that spoil quickly and items where market power is concentrated at a few chokepoints.

It is estimated that, over the last five cycles of Ramazan, the price of the most basic basket of food, as tracked by the Sensitive Price Index (SPI), has increased by an average of 27 percent every year. This is the spike that is in addition to overall inflation at play. Before the start of the holy month, as demand picks up, prices of food items start picking up, with perishable items leading the charge.

After death and taxes, the biggest certainty in Pakistan is the annual spike in the price of basic commodities, especially fruits, vegetables and proteins, during the holy month of Ramazan. The price hike not only constrains household consumption but also leads to negative long-term repercussions in terms of health and social inequality, since it affects the economically vulnerable the most. What is the real cause of this seasonal price inflation and can we muster anything other than moral outrage to control it?

After death and taxes, the biggest certainty in Pakistan is the annual spike in the price of basic commodities, especially fruits, vegetables and proteins, during the holy month of Ramazan. The price hike not only constrains household consumption but also leads to negative long-term repercussions in terms of health and social inequality, since it affects the economically vulnerable the most. What is the real cause of this seasonal price inflation and can we muster anything other than moral outrage to control it?

Banana remains the most volatile fruit, with prices increasing on average by 30 percent during Ramazan, relative to adjacent months, but sometimes increasing by as much as 70 percent during the first two weeks of Ramazan. It is estimated that, on average, the price of perishable items — which includes fruits and vegetables — increases by an average of 41 percent during Ramazan, while non-perishables increase by 20 percent.

For many families, this is not a minor concern. Food is already the biggest monthly expense, making up almost 48 percent of the monthly budget of the poorest 40 percent of the country’s households (more than seven million households). A lazy assessment of the same would suggest that people consume a lot, but the reality is that they do not have sufficient incomes. Hence, whatever they have, most actually gets spent on food, leaving very little for other essentials, such as education, health or any other shocks.

When prices jump, there is no ‘extra’ money to absorb the shock. Something has to give. Milk becomes less frequent, meat disappears from the week (or even month), fruit turns into a luxury, and the household’s nutrition quietly deteriorates in the very month built around restraint, empathy and care.

But if a pattern can be observed, if there is seasonality, the same can also be managed through targeted policy interventions. This is not a feeling. It is a pattern, and it is avoidable. To understand why prices escalate so much, and what it will take to prevent it, we need to evaluate the problem through two lenses.

One is the consumer’s lens, wherein we look at what people actually pay at the retail level. The other is the supply chain lens, wherein we see what is happening in wholesale markets, where prices are discovered before they travel to your neighbourhood shop. When the two lenses are combined, the picture becomes clearer, and so do the solutions.

MEASURING THE PROBLEM

Economists hide behind complicated models. This problem doesn’t require that, but it requires careful measurement and honest interpretation. In the work behind this piece, two separate........

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