Pakistan’s food sector has seen a 47% increase in revenues in the first quarter of 2023, showing resilience against the ongoing economic crisis.
The encouraging revenue growth primarily stemmed from four major conglomerates i.e. Nestle Pakistan, FrieslandCampina Engro Pakistan, PREMA of At Tahour, and Fauji Foods, noted a JS Research report on the basis of 11 listed food companies.
The growth is actually due to unit price increases driven by record-breaking food inflation rather than an increase in sales volumes, said JS Global analyst Amreen Soorani. According to the Pakistan Bureau of Statistics, CPI Inflation for April has risen to 36.4% on a YoY basis which is the highest since the government started data collection in 1965.
The food inflation on the other hand has skyrocketed to 46.8% while the effect is worse in villages where the number crossed 52.2%. The food sector has successfully passed on these inflationary pressures to end consumers while also increasing the operating margins to 17% by achieving higher efficiency in expenses.
“Moreover, in the international market, prices of many commodities such as vegetable oil and seeds have gone down, which has also contributed to the increased margins,” said Muhammad Ali, an analyst at AKD Research.
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This was hoarding signal given to almost all large scale entities before October 2022 given by all parties including pti. They started producing more with old prices and pti welcome price increase from feb 2023 onwards and rein was handed over to pdm to date. Number of items sold is still less compared to YoY sale but with double the price so that election campaigns will be financed.