Predictable price hike in Ramazan

The way this particular federal cabinet has been thumping its chest and rattling its sabre about all the things it is going to do to hoarders, profiteers and market manipulators, it was thought that this Ramazan people might be spared the exploitative price hike in essential items that usually comes hand in hand with the holy month. Yet prices of all necessary food items including fruits, vegetables, poultry, eggs, pulses, rice, cooking oil and sugar have been inching up not just since the start of Ramazan, but for a good two weeks before it. Now the government will make the same claims and promises all over again, perhaps even take some action here and there and rationalise some prices, but it is already too late. Middle income groups, who generally stock up just before Ramazan, have already been fleeced by unscrupulous traders salivating at the prospect of abnormal profits that come this time every year. And the lower income groups, especially those that rely on daily wages to make ends meet, have had no option these past few days of fasting but to willingly submit to all the exploitation. Even if the government moves with exemplary speed now, which is very doubtful in the best of times, it will not be able to undo all the damage that has been done.

This year the holy month has come under extraordinary circumstances. Things are bad enough with countries locked down, economies contracting and a lot of people's incomes either significantly reduced or disappeared completely. In just a matter of months, this coronavirus pandemic has greatly changed the way in which much of the world lives and works. For traders to leverage an assured seasonal spike in demand because of Ramazan for abnormal gains now, especially in countries like Pakistan where the coronavirus threatens to double the poverty rate rather quickly, is simply unforgivable and should already have attracted the attention of the government. If these trends can find their way to newspapers, surely they would also have reached the good offices of the deputy commissioners who have been mandated to check prices and stocks of all necessary items during Ramazan. Now the time has come for the government to look into not just the price hike itself, but also the negligence on part of the government machinery which, at the end of the day, hurts the people and embarrasses the cabinet that made all those tall promises.

The first order of business must be investigating just what caused prices to move upwards at this particular point in time. There could well be some weight in the argument that all this happened only because of the supply bottlenecks forced by the lockdown. If that is indeed the case, wasn't it the government's responsibility to act ahead of time and make sure supply chains of all essential items are protected for the duration of Ramazan at the very least? However, it is very likely that once investigators get their feet on the ground they will find more than just the constraints of the lockdown at play. And some patterns are just impossible to ignore. Commodity dealers, for example, are in the habit of first keeping prices stable, then jacking them up to the tune of Rs100 per 50kg bag for no reason at all before letting them drop a trickle. Then they do the same thing all over again. Apparently, they have been at it for quite a while; generating multi-billion rupee profits in just the last six months. If claims about sugar millers are indeed true, it doesn't seem that the industry has been very impressed by the high level FIA investigation going on - delayed as usual - about all the alleged corruption its biggest players regularly indulge in. Also, it would seem a little odd that supply chains of practically all pulses and vegetables regularly used in Ramazan were also compromised just around this time when prices go up without fail every year.

It seems federal and provincial governments are either not interested or are having a hard time in implementing the state's writ. Recently, on April 22, Punjab government officials patted themselves on the back on prime time television for introducing an ordinance to curb hoarding of essential commodities and punish any and all perpetrators. Yet now they are nowhere to be seen as prices are rising, leading to a petition filed in the Lahore High Court (LHC) seeking action against hoarding and artificial inflation. The government must take very urgent notice of the people's problems lest more discontent builds and snowballs unnecessarily. The last time the federal government spoke about Ramazan was in early April when it announced a Rs2.5 billion package for 19 items to be sold through the Utility Stores Corporation (USC). Since then, unfortunately, the more regressive market forces have been left to act as they usually do. If there's one thing that's predictable about Ramazan and that is, the prices rise no matter what the government says.