Despite falling demand

Contrary to expectations, prices of chicken have increased in Karachi even in the midst of the coronavirus pandemic, in a strange defiance of the law of demand. Over the past few days, the wholesale price of live birds has increased to Rs210 a kg from Rs140 and that of chicken meat to Rs367 a kg from Rs245. The price of boneless chicken is higher. Veal is selling for Rs600-700 a kg and mutton for Rs1,200 a kg. Quality fish is available for Rs700 a kg. Even if we make an allowance for the usual rise in prices of food items in Ramazan, the increase in prices of chicken and chicken meat leaves us perplexed considering the decline in demand for chicken following the prolonged shutdown put in place to control the spread of the deadly coronavirus.

Hotels, restaurants and wedding halls have been staying closed in Sindh since the third week of March, and other social gatherings too are not taking place. These are places of meat consumption. Logically, such a situation should have brought down the prices of chicken, but ironically things are going in the opposite direction. One apparent reason for the price hike is that sensing a decrease in consumption and bottlenecks in transportation of chickenfeed and birds, poultry farmers had decided to cut down on production of broiler chickens, especially in view of the hot weather when heat threatens the survival of chicks.

However, profiteering too could account for the price rise both at the wholesale and retail levels. Since most of the government machinery is engaged in dealing with the coronavirus pandemic, traders are taking undue advantage of the situation. Usually, during Ramazan, traders rip off consumers through price gouging. Seldom do they sell things at prices prominently displayed at their shops. Economists hold that traders don’t need government permission to lower prices. But more often than not they don’t need the administration’s permission to increase prices.

Published in The Express Tribune, May 14^th, 2020.

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