AFTER a decade of expansion, indicators suggest shrinkage in the Eidul Azha economy this year.

Higher GDP growth rates and the spirit of animal sacrifice not sufficient, it seems, to drive the market of annual faith-based festivals in the country.

Eid-related activity was significantly less than last year according to anecdotal evidence from businessmen. Data circulating in the market supports the observation.

The decline in the flow of remittances and the Pakistan Tanners Association’s leaner projections of Rs350 billion livestock market (the same level as of last year) lend credence to this perception.

The prices of sacrificial animals were about 30pc higher initially and might have contributed to subnormal activity, but that does not sufficiently explain the sudden change in the direction of the spending graph. In the absence of dependable data (cattle trade is dominantly cash based), assessments are based on approximations.

Business circles were confused and speculating as to the causes behind this fall. Official circles were indifferent. When contacted, politicians unconvincingly tried to give the slowdown a spin to support their party’s narrative.

When the information was shared with the high-ups in the State Bank, they told Dawn that the data has not yet been released, but remittance inflows have improved in the current month.

“If the market was still dull, it warrants deeper investigation of dynamics of the Eid economy. It is not necessarily bad. People might have invested their savings and the squeeze actually reflects more matured economic behaviour,” the official said, hinting at the tendency of ostentation in the society.

“A complex slew of tangible and psychological factors cross-germinated to pull the market down significantly.

“It all started with dwindling investment in the cattle market, uptick in the real estate sector, short supply of small animals, elevated costs escalated by wet weather, higher opening prices, fall in effective demand because of fall in the volume of remittances,” commented an analyst interested in the subject.

Factors are unable to sufficiently explain the sudden change in direction of the spending graph

Saqib Butt, a young businessman leading a company of meat-based products, sounded excited last week. “What is going on? Am I missing something? Our business usually slides to its one-third in this period. [But this time around] it is less than a week to the Eid and sales have yet to show signs of weakening.

“We plan ahead for this lean period to attend to neglected issues such as hygiene standards at our plants, re-evaluation of our business plan, etc. All this is normally done in an eight-week period that starts a month before Baqra Eid. I can confirm this did not happen this year.

“I did not hear about the activity of retail investors either. Neither did I receive requests for cattle from my circle of friends and family. Last year I arranged for 50 cattle heads against twice as many requests,” he said.

Another businessman related to the sector drew attention towards the chicken price trend as an evidence of deviation from the norm. “Poultry prices traditionally slide a month before Eid. This year they sustained and fell just days before the festival.

“We deal in poultry-based food products and wait for the price drop to build inventory. For industrial clients’ boneless chicken meat price dropped by Rs100 per kg on Aug 21 but it was too late as there was hardly any time left before the holidays to build inventory”, he stated.

In anticipation of excessive supply of meat at Eid, Pakistani families stop buying meat and meat products to clear their deep freezers of stored stocks to make space for Eid meat.

Officials in economic ministries showed no interest in the subject. “It is not our business. It is the people’s choice what they wish to do with their money or how they respond to religious calls. I don’t think that the subject has ever been discussed at any policy forum in Islamabad”, a top officer at an economic ministry said.

Sikandar Hayat Bosan, federal minister for food security and research, was in Lahore and unable to make himself available for health reasons. Some other seniors of the ruling party were quick to blame it on political opponents. “People are disheartened by the exit of an elected PM. The trend reflects the public mood”, one PML-N loyalist commented.

Independent analysts dismissed politicised comments, though they concurred that in times of political uncertainty people tend to hold liquidity and cut on avoidable spending.

“I don’t think that someone who has been performing the ritual can be dissuaded by political concerns. He might make adjustments for any number of reasons”, one banker commented.

Another attributed the relative calm this year to the rise in companies offering Qurbani services. “I can tell you that a number of my friends in Karachi and Islamabad have turned to companies such as MeatOne, Zenith, MeatPro, etc, as they have no time or interest to do Qurbani at home”, a young professional commented.

“Do you consider Careem’s (a car hailing service) new campaign ‘Your Bakra has arrived’ a spoof? I think it’s a very smart business move. They understand the society well and capitalise on demand supply gaps. I think the idea will fly”, he added. He was referring to a recently launched service to provide cattle on demand at the customer’s doorstep.

Some people are also propagating the idea of donating their Qurbani budget to support social causes and philanthropic organisations.

For those who monitor markets closely, the fall in the Eid market was not surprising as they had already marked a steep fall in retail investment in the cattle market this year.

Published in Dawn, The Business and Finance Weekly, September 5th, 2017