Usama Abdul Rauf
Ramadan is both a month of prayer and self-denial. It is supposed to train the lust and streamline the consumption. But once in a year, as the sacred month nears, families starts adjusting grocery lists, wholesalers are on the move, and market prices are also starting to shift. The paradox is familiar. A time of an austerity policy is usually accompanied by quantifiable strain on key commodities.
Think of the time before Ramadan towards the end of 2024. Weekly inflation in November 2024 was 0.67 percent. Some of the basic commodities were stable and even slightly decreasing. These were slight declines in sugar and wheat flour. The situation in the market was relatively stable, there were no significant peaks in perishables or protein products.
Compare that now to the week ending 13 March 2025, when it is the Ramadan period. Inflation was significantly stronger on a weekly basis. There was an increase of 36 percent in tomatoes in one week. The price of chicken rose by 6.4 percent. Sugar, that hitherto had been stable, increased by approximately 6 percent. These were not fringe benefits. They were focused initiatives on accurately those items that prevail in Ramadan consumption baskets.
The same rhythm was also present in the next cycle. The weekly rate of price growth was quite low at a humble 0.31 percent in the week ending 13 August 2025, which is well before Ramadan. A number of necessary commodities were not very volatile. However, now the weekly inflation grew accelerated to 1.16 percent. In one week bananas increased by 16 percent. Again upwards pressure was demonstrated in chicken and tomatoes. There is consistency in this rhythm, and this indicates that it must be something structural and not accidental.
The former is due to the concentration of demand. Ramadan does not just augment the consumption. It synchronises it. There is a huge purchase of similar commodities by homes in the nation at approximately the same period. Demand of items such as sugar, cooking oil, flour, dates, poultry and fruits are clustered in a narrow range. Even a stable supply annually may experience short term pressure when the demand is not evenly distributed.
This is enhanced by behaviour. In case the consumers expect prices to rise, they start to purchase earlier or more. This is a sensible anticipatory purchasing on an individual level. When, however, a large number of millions of households respond to the same expectations, the outcome may be expectations driven inflation. The prices not only increase due to tight supply, but because the market participants are convinced that it will be tight. The expectations make themselves true.
The results are also determined by wholesale market structure. Mandi networks have an imbalanced distribution of information. Big traders usually have insight into the volume of incoming supplies as compared to small-scale retailers. Retailers react by changing prices when the cues of the tighter availability before replacement costs are fully realised. Competition at the top is thin which makes inventory holding a strategic move. A few days delay in releasing stock at the time of high demand can increase margins. Downstream retailers react.
These pressures are aggravated by energy volatility. Moving perishables have a moderate impact on transportation costs due to even slight alterations in the cost of fuel. Cold storage and cold distribution are affected by electricity charges. When all these elements of cost are flowing in a time of increased demand, their aggregate impact can be increased in the retail level.
The cyclical nature of the seasons indicates that reactive measures might not be adequate. Much of the policy emphasis will tend to kick into operation when the prices are already in motion. A more preventative intervention would be based on an enhanced real time monitoring of inventory, deliveries, and interprovincial traffic.
Better coordination of data collection and market oversight mechanism is also important. Demand changes seasonally are predictable. It is not a case of heavy intervention but the goal is to be better anticipated. When the wholesale arrivals, storage capacity and the transportation bottlenecks are digitally monitored, uncertainty can be minimized before it becomes reflected in price spikes. Finally, the Ramadan price trend provides more structural characteristics of food markets. The supply chains are still divided. There is limited storage capacity of perishable goods.
Ramadan will always reshape consumption behaviour. That is part of its social character. The difficulty lies in making sure that the expected seasonal demand does not turn out again into preventable instability. The economic rhythm of the month could be more stable by means of enhancing the transparency, coordination of the supply chains and promotion of competitive practices in the marketplace. In doing so, the marketplace can better reflect the spirit of balance that Ramadan seeks to promote.
