A recent study by the Khazanah Research Institute (KRI) has explored the dynamics of food price changes during Ramadan in Malaysia, revealing that while there is an observed increase in food prices during the holy month, this increase is not statistically significant compared to other months.
The report, authored by Jarud Romadan Khalidi and Nik Syafiah Anis Nik Sharifulden, researchers at KRI, delves into the factors influencing food prices during Ramadan, a significant month in the Islamic calendar marked by fasting from dawn to dusk.
The study highlights that the “Ramadan effect,” which encompasses changes in social and economic life, also extends to food consumption patterns. Researchers suggest that increased demand for specific foods like dates, meat, and seafood, driven by elaborate meals for iftar (breaking fast) and suhoor (pre-dawn meal), contributes to price fluctuations. Communal iftar gatherings at mosques and Ramadan bazaars further amplify this demand. The influence of social media in shaping consumption patterns during Ramadan also plays a role, with food-related content potentially driving demand for certain items.
The report also notes that higher food consumption during Ramadan leads to increased food waste, with Malaysia seeing a 15% to 20% rise in food waste during the month.
On the supply side, the study indicates that while producers may increase supply in anticipation of higher demand, it is not always sufficient to offset price pressures. Seasonal fluctuations, higher transportation and logistics costs, and potential price gouging by sellers can contribute to price volatility. The Khazanah Research Institute emphasizes that food price fluctuations during Ramadan are influenced by a combination of supply and demand dynamics, as well as cultural and behavioral factors.
To analyze price changes, the researchers used the Consumer Price Index (CPI) and the Food and Beverages Index from 2000 to 2024. Given that these indices are reported according to the Gregorian calendar, which differs from the Islamic Hijri calendar, the researchers employed a methodology to transform the price indicators to represent Hijri months.
The findings indicate that while there are some Hijri years with steep price increases around Ramadan, an overall consistent pattern is difficult to discern due to the volatility of month-to-month changes. However, the average monthly change for food and beverages shows a gradual increase leading up to Ramadan, with a sharp increase during Ramadan itself, before tapering off.
Analysis of specific food groups reveals that fish and other seafood experience the most significant price increase during Ramadan. Meat, fruits, and nuts also show an upward trend in prices as Ramadan approaches.
The Khazanah Research Institute concludes that while food prices, on average, tend to rise during Ramadan, this increase is not statistically significant compared to other months. The report emphasizes that this analysis does not account for seasonal effects and other factors that could influence price changes. It calls for future research to explore the broader dynamics at play and identify specific food items with significant price fluctuations during Ramadan, with the aim of informing efforts to manage the cost of living more effectively.
