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In the 8 weeks since price of broiler chicken hit rock bottom, it has touched a fresh high, with no end in sight to the ascent. While the 70 percent rise in average retail price during the intervening period has been written off by some commentators as outcome of ‘lockdown confusion’, the explanation is misleading.

Between 2016-19, seasonal price between March and May end (8-week period) recorded relative stability, oscillating in both directions by less than 10 percent. However, even if the sudden plummeting of price in the last week of Mar-20 is disregarded, by May end poultry price had increased by a whopping 38 percent compared to price in weeks prior to lockdown.

Of course, explanations are aplenty. The uncertainty surrounding length and severity of the lockdown during the early days led to immediate fire sale of this largely perishable source of protein, with rumours of large-scale culling of flocks at poultry farms.

Then came the sudden reversal in federal view on lockdown mid-April, which also coincided with peak demand season of Ramzan and Eid. In the weeks that followed, the upward spiral in price was only natural since farms had not raised/invested in fresh flocks given anticipation of demand suppression.

But the temporary supply shortfall was supposed to give way to supply restoration by Eid weekend, especially because according to sector experts it takes 6-8 weeks for a fresh stock to be raised and supplied to market. Except, if national average poultry price is at all forward-looking, it is showing no sign of slowdown.

That is where the ‘lockdown confusion’ theory deserves some merit. While the countrywide suspension of economic activity seen since 23-March has effectively ended, the matter is not as straightforward for protein suppliers.

For one – even though home deliveries were resumed nearly a month ago – restaurants, eateries and dhabas are yet to see a full demand recovery due to ban on dine-in. This has apparently fuelled more uncertainty, constraining supply. On the other hand, the increase in food supplies by charity drives should have - to some extent – made up for lost restaurant consumption but has not reflected in prices so far. Unless of course, charity drives have caused an upward shift in demand curve, a highly unlikely explanation.

Still others believe that the uncertainty regarding the future of large social gatherings such as weddings, festivals, and conferences is keeping suppliers on the side-lines, impacting working capital investment. Except, unlike Dec-Jan, summer months are hardly wedding season in Pakistan. In fact, poultry prices seasonally plummet post-Eid ul Fitr across the country, bottoming-out by Sep-Oct after Eid-ul-Adha and Aashura, when substitute red meat is more popular for cultural reasons.

Thus, while indefinite ban on social gatherings may cause uncertainty for poultry suppliers in the medium term, now does not appear to be the time for it. Then, is it another case of businesses profiteering from a tragedy?

Not really, in fact, the explanation appears to be much simpler. Look at the city-wise differences in poultry prices, and it is hard not to notice a trend. Prices are progressively lower as one moves north to south from Punjab to Sindh. In fact, for the week ending 28-May, average price of broiler between Lahore and Karachi offered an arbitrage of exactly Rs100 per kg – not accounting for the transportation cost, of course.

It appears then that delayed stabilization of national poultry price is due to weightage of markets surveyed in Karachi as part of PBS’ Sensitive Price Index. Moreover, regional difference in prices explain that poultry price is reverting to mean across the country gradually. And that delayed reversion in south is simply a reflection of different paces followed by provinces in easing the lockdown, and in turn allowing the demand to recover.