Ramadan, the 9th month on the Islamic calendar, is set to commence on the 22nd of March this year. The month is characterised by fasting during the daytime hours and elaborate meals during the opposite ends of the day. Ramadan is observed by over 1.9 billion people around the world, especially in the Middle East and North Africa (MENA) region and South Asia.
A few weeks leading up to Ramadan to the Eid al Fitr celebration at the end of the month, consumers usually rush to local markets to purchase a variety of food items utilised in the preparation of signature dishes such as the Egyptian Mahshi, the Indonesian Kolak, and Harees in the UAE. Besides these home-cooked meals, many people eat out in the UAE and Egypt, with restaurants and cafes remaining open with extended late hours. As a result, consumer demand for food products, such as chickpeas, dried peas, dates, and meat rises significantly during this period.
This wave of spending usually leads to prices of certain food items skyrocketing in the months leading up to Ramadan as suppliers capitalise on high consumer demand. In Bangladesh, the prices of chickpeas, dried peas, and dates, the most-consumed products during Ramadan, have risen significantly. Wholesale prices of chickpeas at Khatungonj market, one of Bangladesh's largest commodity hubs, rose to about USD 0.75 per kg in March 2023, a 19% increase over the past month and a rise of 21% over the past two years. Prices of dates have also risen by 12.5% MoM to USD 8.58 per kg, while dried peas now cost USD 0.56 per kg, a 11% MoM increase. According to Tridge price data, at the Obour market in Egypt, wholesale prices of fresh Siwi dates rose to USD 1.19 per kg on the 6th of March from USD 0.91 per kg on the 6th of February, a 30.8% increase.
Countries like Indonesia, UAE, and Egypt have taken different measures to curb this bullish price trend. The Indonesian government aims to provide subsidies in response to significant increases in commodity prices ahead of Ramadan and Eid al Fitr. The Indonesian Trade Ministry has been monitoring the price trend of necessities such as soybeans, vegetable oil, rice, onions, and meat, and intends to distribute rice stocks to the market to stabilise the price. According to Beef Central, beef prices remain relatively flat in Indonesia, with fresh beef trading at USD 13.30 per kg at wet markets. In the UAE, leading industry players have placed sizable discounts on food products to encourage sales. Many retailers in the country, such as Union Coop, have placed discounts of up to 75% on food items including fruit and vegetables, canned food, rice, and meat. Most of the sales campaigns were launched on the 24th of February and will continue till the end of Ramadan.
Source: Gulf News
The Egyptian government is also making plans to alleviate pressures stemming from elevated food prices. One of these initiatives is the introduction of the "Ahlan (Welcome) Ramadan" markets three months before the start of Ramadan, aimed at offering food items at discounted prices. These markets sell flour, meat, and pasta at prices lower than those of commercial markets. For example, on the 9th of March, lamb meat at Ahlan Ramadan markets sold for USD 4.72 per kg, while the product traded as high as USD 8.13 per kg at local butcheries and commercial chains, 72.4% more than the Ahlan Ramadan markets.
The high demand for products such as chickpeas and dates has resulted in high volumes of imports over the past month in preparation for Ramadan. India and Australia, leading global suppliers of chickpeas, have been the major beneficiaries of this situation. According to Chittagong Customs House, Bangladesh imported 97K mt of chickpeas from India and Australia over the past seven months, with an extra 76K mt of chickpeas currently in transit. This total of 173K mt is 147% more than the yearly average of 70K mt. Of the 97K mt of chickpeas already imported into Bangladesh, 43K mt were imported in January alone, in preparation for Ramadan.
Consumers can expect an upward trend in prices throughout the month of Ramadan until the end of the Eid al-Fitr festival, which is set to begin on the 20th of April. However, Tridge expects prices to enter the lower range from the last week of April into May as consumption levels return to normal. The price trend is expected to follow an opposite pattern in countries offering extensive Ramadan discounts, as these price cuts only run till the end of Ramadan, leaving consumers to purchase products void of discounts from local butcheries and commercial markets. Imports of products such as chickpeas, dried peas, and dates are expected to drop in May and June, as most countries import more than required in preparation for Ramadan, leaving surplus stocks when the month ends.
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