Milk perishability , Milk Prices and what it teaches us about inflation !

One of the major benefits of having a good road network in Pakistan has been that on many food items Pakistan has become one market. Why do i say this ? The price at which those items are available is quite close to being same across the country. Those near the production source and those far away are able to get at similar prices.

However this is not the case with all items.

Milk is a good example. There is extreme price variability across different districts .

Gallup Pakistan Digital Analytics dashboard on inflation and prices tracks close to 50 different CPI basket items .

Here it can be seen that price of 1 litre milk varies from close to 150 PKR in Sialkot (closer to source of milk) and Larkana (around 240 PKR).

Here the issue remains how we store and transport milk . Lack of processing and lack of refrigeration makes the availability restricted and therefore prices rise.

Every now and then government moves after retailors and forces them to lower price . In their wisdom when prices rise , its always some one making money. But the fact remains prices are at the end of day determined by demand and supply . If the cost of supply is higher or the supply itself is costly than the prices would go up.

We need to invest therefore in better understanding of pricing phenomenon in the country and this dashboard is our contribution to this cause.

Please access the dashboard here

https://lnkd.in/dTwPZbyX