The cattle market was relatively dull till the filing of this report two days before Eidul Azha. Traders were anxious keeping fingers crossed but many keen watchers believe that buyers will turn up in numbers large enough to sweep city mundis clean, keeping the prices from crashing despite rains in the end.
Till Friday, quoted prices were 40 to 50 per cent higher than last year but much depends on the hustling skills of buyers. In the absence of big players, there is no uniformity in quality, size and prices. The fragmentation of the livestock market in the country and the presence of countless small suppliers is supposed to work in favour of buyers but again many factors decide the worth of each deal.
Eroding buying power under hyperinflation in Pakistan must have shrunk the market somewhat and affected its composition with a greater number of people opting for ‘collective Qurbani’ options offered by an ever greater number of religious, civil and philanthropic entities. The high-value cattle breeders, however, may remain immune to general economic woes as their business is based on demand that is price inelastic. They might be a miniscule 3-5pc of the total Eid Qurbani customer’s base, but wealthy enthusiasts buy whatever animal they fancy and in as many numbers they want irrespective of the price tag.
Mostly cash-based transactions in cattle mundis make assessment and dissection of the market difficult. An intelligent estimate, however, rounds off the size of the Eidul Azha market at around Rs150 billion this year down from about Rs170bn last year, a shrinkage of about 10 to 12pc.
According to guesstimates, the size of the Eidul Azha economy this year is around Rs150 billion, down from about Rs170bn last year
The guestimate was worked taking into account Eid induced spike in bank withdrawals and remittances, activities of commercial entities and charities big and small offering schemes of sacrificial services, a spike in digital options, hide collection arrangements by relevant outfits, projections of animal skins collection by tanneries and leather industry and numbers of registered cattle heads in the government-supervised dedicated locations and their average price across the country.
Some readers might find these numbers absurdly high but people invested in the cattle trade and close watchers consider the figure very conservative.
Many cattle sellers converging in the biggest mundi of the country — Karachi, often come from afar with their stocks in search of good returns. These petty farmers or their local dealers are keen to complete the business and return home with proceeds as quickly as they can. The idea of returning back without selling all their animals is just not viable for them. They have a narrow window of a few days to assess the market and bag the deal even if the profit is less than their expectation.
The quality, the size of stock and marketing skills matter but much depends on lady luck that gets to decide their fortunes in the absence of any kind of price limits. Prices tend to be relatively high in Karachi owing to a bigger logistic component in the cost.
The situation of the Eid market varies with locations across Pakistan. In Punjab, the stronger familial ties of city dwellers with their pinds (villages) open up more possibilities. Besides, because of the rural-urban proximity in the biggest province, the component of logistic cost is relatively smaller so average prices are also comparatively lower.
People associated directly or indirectly with this annual market said the supply of animals to urban areas dropped this year by significantly more than 10pc, primarily owing to a fall in investment in cattle breeding for Eid for the fear of disease outbreak (Lumpy skin) etc.
“High inflation could pull up the nominal value of the Eid market and mask the real drop in animal trade but insiders know that the higher cost of cattle breeding/rearing and the greater health risk level posed limits on growth potential,” a CEO of a big company in the meat business said.
The Covid situation in 2020 and 2021 forced people, particularly the technology-savvy younger lot and overseas Pakistanis to switch to hassle-free online Qurbani options. Adjusting to the new normal, multiple relevant commercial and charitable organisations focus on an online presence. Today they offer multiple schemes with share prices quoted not just in local but also in foreign currencies of countries from where demand generates.
Leaders of the leather industry were focused on the preservation of hides on this occasion when roughly half a million animals are slaughtered over three days. The current wastage level is said to be a high 50pc.
“All it needs is government attention. We have forwarded suggestions at all levels in this regard but continue to watch precious raw material rot from the lack of basic care. If salt is applied on the skin immediately by butchers the rate of wastage can be controlled significantly,” Syed Shujaat Ali, a leading leather garment exporter pleaded.
“I have lost 10 years of progress in my business this year and am back to my 2012 level in sales. I can’t imagine how Eid markets can sustain at last year’s level in the current harsh economic environment when the survival of average households has become difficult,” Saqib Butt a leading player in the local frozen meat preparations market and exporter commented from Rawalpindi over the phone.
Rafique Bokhari, a successful businessman of Karachi, was not ready to give up hope and was confident that Eid will bring blessings. “Sales will pick up God willing. Countless rural families toil hard to raise cattle with the intent to capitalise on this once-a-year opportunity. They also have a right to all the happiness that money can buy,” he said.
Published in Dawn, The Business and Finance Weekly, July 13th, 2022