Food Prices In Pakistan Commerce Essay

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The thesis is focusing on the food prices. A comparison has been done on food prices. An overview is done on different packaged food companies such as National Foods and Shan foods.

There are some unbranded players operating in spice market are self-owned independent businesses that do not have affiliations with any brand in particular. A major problem with such setups is that they are largely undocumented and unorganized, which precludes to estimate the approximate market size. Due to such players, it is also difficult to ascertain the taxation and the number of people employed in this industry. However, PGA-Pakistan grocers association (SMEDA) quotes that in the last few years the trend has been changing and market share of loose spices is gradually decreasing.

This decrease in local purchase of spices is basically due to introduction of packaged foods. People are more attracted to ease of use.

People in Pakistan are mostly price conscious and ailments like stomach ache, gastroenteritis, diarrhea and others like nausea. This does not only happen after consuming food at open places (roadsides etc.) but also with home cooked meals using open spices. Although there is no detailed study to show the exact reason behind disorders such as those mentioned above, but contaminated spices used in cooking appears to be a leading cause. Open red chilli powder contains talcum powder, saw dust, brick powder, sand and dirt , is extensively being used by chilli merchants across the country. Such contamination also takes place in turmeric, black pepper, coriander, ginger etc. that can cause mental retardation, cancer and other toxic effects on health, only increasing profits for the merchants. Such practices are on the rise in open markets where profit making seems to be the only reason to do business, regardless of the impact it creates.

Some the paper suggests that after all such issues a shift has been observed towards packaged food industry. National foods and Shan foods being on top as of its market share.



Looking at the Pakistani prices and thee rising of inflation rates, I decided to choose a topic which tries to focus on the problem or the cause that has made this rise in prices. Whenever you go out f the houses you have to consume food items the purchasing power in last ten years have declined. For the poor it is far worse, the purchasing power have lowered down, no one can afford. The overall inflation rose from 4.41 (2000-2001) to 11.73 in 2010.

Moreover in this research I will also be finding out the alternatives which consumers now use. I will be analyzing the different masala consumptions. There have been a lot of companies which have started this masala business. As it is easy cooking, people do not have time, and if the basic kitchen items are not available then these masala's add a lot of flavor. National foods will be used in the research.

Elevating food prices will change both the economy of a country and its social circumstances, as well as the political and the standard of livings of people. The food price inflation radically worsened the food safety circumstances in Pakistan; about 17 million people connected the food insecure group. In the immediate future, it is essential to produce more crops and fulfill the storages. Meat, vegetables, fruits, oils and ghee also experienced sharp increases, with prices of butter and milk almost doubling. 

Area of Interest

The area of interest which appealed me was the fluctuating prices. If we compare the prices from a year, they have risen. Moreover there is also a distinct factor and the buying pattern on urban and rural areas. In urban areas people have shifted to the packed spices as of lack of time. While in rural areas people buy all the kitchen basic vegetables. Some have also planted vegetables at their homes. Apart from the alternatives, the cause of the rise in prices is also an important factor. The basic reason is the exports, hoarding of stock and government policies.

Area of Research

This research will find how price fluctuations have impacted the consumer behavior. Moreover it will also be looking at the shift of consumers towards the packed spices ingredients. The important factor in my research is to find out what ere the prices in 2007 and 2008. And how have the variations affected the consumers and what were the causes. Then I will also be comparing the prices in 2012 and what factors have enabled this variation in prices.

An important factor in my research is that some kitchen food products are very essential. Such items include tomatoes and onions, as without these nothing can be cooked. So I will be looking at their price patterns and consumers behaviors.

Company Introduction

National Foods started in 1970. It has been known for its healthy food products. The company is known for providing females an ease of life by giving them healthy food, to give them hygienic food, and to reduce their time spent in kitchen. After Three decades it has diversified into a flexible Food Company with over 110 products and 165 and above Stock Keeping Unit for the domestic market and over 100 different products for the international markets.

The vision of National Foods is to see its company as an efficiently managed Human Resource company. It set its human resource 7 years ago, was realized by transforming a local company into a very active and progressive organization structure in line with industry practices.

The capable Human Resources from within the company have fuelled marvelous growth by excelling in Functional Management. Even after 3 decades the company's central point still leftovers on Customer's needs through Product development in line with the changing market trends.

In this inventive age of ever altering lifestyles, fuelled by the out of control growth of technology; consumers have been obliged to vary their eating habits. National Foods responds to this confront of pioneering food products based on ease and swift preparation in line with recent lifestyles and yet retains fixed values through its notable collection of food products.

The brand delivers its definitive assure by constantly delivering worth to its consumers. National Foods enriches family relationships by bringing people together for family traditions, feasts, seasonal holidays and of course - everyday life.

Vision and Mission Statement 

To be a Rs.50 billion food company by the year 2020 in the convenience food segment by launching products and services in the domestic and international markets that enhance lifestyle and create value for our customers through management excellence at all levels.

Organizational culture

The company national foods have a very friendly culture within the organization. They have two departments upon which they have their strategy; HAMSAB and CSR. HAMSAB platform is to build and sustain a healthy positive atmosphere in the organization. This area also enhances the communication gaps within the employees horizontally and vertically. The aim is to integrate ideas and treat everyone fairly.

The second area is CSR and its aim is to unfold the foundation NFL's business. At NFL they realize that CSR commitments must reflect corporate personality. They reflect these commitments in their values, policies and practices.


Plain spices


Best recipes

Recipe concoction

Chinese salt and vinegar



Jam Jellies and Marmalades   




Ready to eat

Powdered drinks


Shan Foods

The journey of Shan foods starts from 1981. Mr. Sikander Sultan, CEO Shan Foods (Pvt.) Ltd, helped cover the way to success by pioneering in the spice business. It was Mr. Sikander Sultan's commitment and dedication that starting from a single room company, today Shan stands as one of the most reputed food company and a powerful global brand with presence in more than 45countries across 5 continents. Initially spice recipe mixes were indeed shared within the family and it was not until much later that orders from distant relatives, friends, acquaintances and even perfect strangers started to arrive. Overtime, the company prospered and Mr. Sikander Sultan decided to launch its very own brand with the name of SHAN. Since then there is no looking back. Shan Foods (Pvt.) Ltd, has, over the past decade, changed more than ever before in its illustrious history.

Company Mission and Vision

Shan Foods' mission explains its success, "

To continuously develop and produce quality products that meet the customers and markets demands, compatible with applicable regulatory requirements. To be a consumer oriented company with keen insigne of food products ensuring quality panty consistency and authentic taste to operate with state of the art technology to obtain optimum results and retain highest quality standard thrived efficient and motivation human resource and inculcate in them a sense of participation and proved for personal goals and development."

We are determined to reach every kitchen by diversifying into growing food categories through innovative, healthy & safe products for the ultimate delight of our consumers.

We will enhance shareholders value through sustainable growth, develop strategic relationship with our business partners and ensure safe work environment for our employees.

Rejuvenating existing business, incoming new ones, manufacturing elevated quality products and getting higher into foreign markets are between the initiatives the company has undertaken with vigor. Today, Shan Foods (Pvt.) Ltd is Pakistan's foremost food company with its products being appreciated globally. Looking to expand its product line, Shan continues to introduce new products that better caters to the changing needs of the consumers. In order to take advantage of growth opportunities, Shan has now enhanced its production capacity even further with the manufacturing units installed in UAE and Saudi Arabia. Shan's success can be attributed to its ability to continually identify and respond to the changing consumer needs through Research and Development, stringent Quality Assurance standards and state-of-the-art manufacturing facility.

Shan is a project of Shariah Compliant business where Shariah guides the business operations and values remain consistent. These values are embraced by its people and have played a major role in Shan's success to date and will continue to do so in future. Shan is a global food brand offering premium quality innovative products, which delight our consumers.

Organization culture

At Shan Foods (Pvt.) Ltd we have more than 1000 people who share the same vision that is aligned behind a clear strategy expressed in a simple road map. Our ambition for Shan Foods (Pvt.) Ltd is to be recognized as the world's trusted leader in taste, quality and to be the main point of reference for outstanding financial performance in our industry. We have produced strong results in the past and will continue to drive our efforts to achieve higher level of performance even in difficult circumstances. Our competitive advantages are our unmatched taste,brand portfolio, R&D capability, unrivaled international spread, values, work culture and employees, who have played a pivotal role in turning our vision and mission into a reality.

The new launch is a part of intensive strategy to compete with local and international Recipe Mix brand, including those from Far East.

The new Recipe Mix has following recipes;

Chicken Chowmein

Manchurian Chinese Chicken


Chicken Sweet n Sour

Chop Suey

Fried Rice

Beef Chicken

Indonesian Satay

Filipino Steak

Malaysian Chicken.

One can see the strategy implemented by Shan is to Think Globally, Act Locally whereby Shan is capturing middle class who cannot afford restaurant or prefer to eat home and Shan is directly competing with Knorr, a brand introduce by Unilever to offer such international cuisine Recipe Mix.

Cause of the Fluctuation in Food Prices

The 2010 Pakistan floods began in late July 2010, resulting from heavy monsoon rains in the Khyber Pakhtunkhwa, Sindh, Punjab and Balochistan regions of Pakistan and affected the Indus River basin. One-fifth of Pakistan's total land area was undersea. According to the statistics the floods directly affected about 20 million people, mostly by damage of property, livelihood and infrastructure, with a death toll of close to 2,000. The Pakistani economy was harmed by extensive damage to infrastructure and crops. 

Effect on food

Floods inundated 17 million acres (69,000 km2) of Pakistan's most fertile crop land, killed 200,000 livestock and washed away huge amounts of grain. A major anxiety was that farmers would be not capable to meet the fall limit for planting new seeds in 2010, which implied a loss of food manufacture in 2011, and potential long term food shortages. The agricultural harm caused lost of 200,000 acres (810 km2) of sugar cane and 200,000 acres (810 km2) of rice, in addition to the loss of over 500,000 tonnes of stocked wheat, 300,000 acres (1,200 km2) of animal fodder and the stored grain losses.

Agricultural crops such as cotton, rice, and sugarcane and to some extent mangoes were badly affected in Punjab, according to a Harvest Tradings-Pakistan spokesman.

In affected Multan Division in South Punjab, some people were seen to be engaging in price-gouging in this disaster, raising prices up to Rs 130/kg. Zarai Taraqiati Bank Limited to write off all agricultural loans in the affected areas in Punjab, Sindh and Khyber Pukhtunkhwa especially for small farmers.

The World Food Programme announced that about 70% of Pakistan's population, mostly in rural areas, did not have adequate access to proper nutrition.

Already resurgent in the Federally Administered Tribal Areas and Khyber-Pakhtunkhwa province, agricultural devastation brought on by the floods left Pakistan more susceptible to an increase in poppy cultivation, given the crop's resiliency and relatively few inputs.

Overpopulation is a generally undesirable condition where an organism's numbers exceed the carrying capacity of its habitat. The main force driving increases in agricultural demand" but "most recent expert assessments are cautiously optimistic about the ability of global food production to keep up with demand for the foreseeable future assuming declining population growth rates.

The observed figures for 2007 show an actual increase in absolute numbers of undernourished people in the world, 923 million in 2007 versus 832 million in 1995; the more recent FAO estimates point to an even more dramatic increase, to 1.02 billion in 2009.

Competitor analysis


Pakistan is the world's ninth largest market with an estimated 170 million consumers. Experts believe that the food retail market in Pakistan is in the throes of landmark changes, with the total number of retail outlets expected to have grown by 15% in the1990s, presently resting at 286,774 outlets. Share of food in household budget is 48.3% in Pakistan. 48.3% of the monthly expenditure is on 'food, beverage and tobacco', followed by 'rent'. This clearly depicts the consumption pattern of an average person living in a developing country like Pakistan. There are two striking differences suggesting a clear division between rural and urban consumption patterns. Firstly, a resident of urban area pays considerably more on rent than a person living in rural area. Secondly, a person residing in rural area spends considerably more amount on 'food, beverage and tobacco' than an average person in the urban area.


Food industry around the globe comprises a niche within itself, referred to as 'spices'. According to the American Spice Trade Association, "today spices have become known as any dried plant product used primarily for seasoning purposes. This all-inclusive definition seems to cover a wide range of plants like herbs, spice seeds and even dehydrated vegetables and spice blends."

Putting spices in a Pakistani perspective, they also comprise the authentic recipe mixes used in traditional cuisine. The Pakistani spice industry can be divided into branded and unbranded industry. SMEDA found out that there are about 7000 spices and salt grinding units operating in Pakistan, 60% of which are rural based. But with the emergence of modern industrial units, the share of these rural based units is decreasing. Spices form a substantial portion of Pakistan's business in terms of imports and exports.

Like any industry and business to be successful, a setup can only achieve growth if some key success factors are taken into account to ensure that the business is run properly. Consistent quality check and high quality control standards are the two important factors that are vital to succeed in the spice industry. Since the last decade, there has been tremendous growth in the spices industry of Pakistan. In the recent past, many new companies have been setup due to high growth prospects in this industry. To be at par with local and international demands, these companies have come up with secure packaging and branded packs, with technological changes having quite an impact. However, growth in this industry revolves around quality, promotion and distribution network. "The following illustration gives an understanding of how work is routed in a conventional spices processing, packing and marketing business:" (SMEDA)There are many factors behind increased demand of spices in Pakistan; a major factor is the changing lifestyles of people who now prefer ready to use ingredients over traditional home made spices. Also, spices have always been in demand due to the sub-continental style of cooking where quality spices are termed synonymous with good food.


Other players in the industry are:

Chef's Pride

Mehran Foods

Ahmed Foods

Habib Foods

Zaiqa Foods

Kitchen Secrets have become difficult for firms to compete and this is one of the main reasons due to which many firms leave the industry. A noteworthy player Galaxy Masala was there in the market in the last decade but has closed down its operations now.


The vital reasons due to which a firm might leave the industry are low consumer response to the company's offerings due to dissatisfaction, high brand loyalty already towards other  brand/player, not shifting to other brands, and monetary and trade concerns. Despite these possible reasons, there are number of players who have survived the stiff competition and come out successful.

National Foods

National Foods is also carrying out competitor's study and in order to be competitive and succeed the competitive worth equation National Foods is focusing on tight control of capital expenditure, improved inventory control, and lower product and manufacturing costs during standardized manufacturing platforms etc. Its main competitors are SHAN industries and Mitchell's.

National Foods is having many well known competitors amongst whom Shan Industries and Mitchell's are worth mentioning. To sustain the competitive advantage over the competitors, National Foods has not only increased its products but has also added many features to them via innovation and technology. 

 In this era of technological advancement, numerous new firms are entering the industry producing products equipped with great features and characteristics, which may also make the already existing firms increase their efforts to maintain their market reputation. National Foods is also facing competition from Mitchell's in many product lines such as sauces.

Moreover as the topic suggest we also have to consider the fact that kitchen items prices have rose. There are completion among the shop keeper and the retailers who are selling. Hence purchasing will depend on this.

These figures show Shan Foods and National Foods both as occupying first position as far as market share is concerned. However, since their complete financial figures could not be accessed at this preliminary stage of report, it is difficult to determine which player currently holds more share when it comes to operating in both Pakistan and international markets. It is noteworthy that the above chart mentions Chef's Pride as holding 15% market share and occupying the second position in branded packs in Pakistan. It has however been observed that this player is not available in majority leading stores across Karachi, which forms quite a substantial market for all branded and unbranded spice dealers.

Research Objectives

Determine the significant kitchen items prices and compare them.

I will be looking at all the necessary kitchen items and compare their prices from 2007 to 2008, by how much have they raised. These items may include all the vegetables which are the basic item for cooking, such as tomatoes and onions. Moreover kitchen also includes cooking oil and sugar, so I will review them in detail.

The purchasing of the relevant kitchen items has fallen by how much

From the past ten years the prices have risen and the poor cannot afford such inflationary prices, so their purchasing power has lowered. I will be analyzing the purchasing power of people.

Find the alternatives items consumer use now

The rising trends of cooking in packaged spice have been in the light. People prefer purchasing the packaged spices or masalas in other to save time and energy. So I will be focusing on the alternatives which people have.

The cause such a rise in the prices

Lastly the causes of this rise of prices will be focused. The problem lies in the fact that Pakistan is agriculture based country, but still the prices are too high. The factors such as hoarding of stock and exports have made the prices increase. So a thorough analysis of what factors have caused the increase I prices will be looked upon.

Literature Review

Ahsan ,et,al (2000) suggested that controlling prices is one of the major responsibilities for the macroeconomic policy-makers. The oil price hike that shifted the rule towards bio-fuels and ordinary calamities increased food prices just about the world. This paper analyses the demand- and supply-side factors that affect food prices in Pakistan. Long-run relationship is analyzed using the Autoregressive Distributed Lag Model (ARDL) for the period 1970 to 2008. The result indicates that supply side factors (subsidies and world food prices) have a significant impact on food prices, whereas demand-side factors, such as money supply, are the main cause of the add to in food prices in the short as well as the long run. The error alteration is statistically major and shows that marketplace forces play a lively role to restore the long-run equilibrium.

Krishnaraj (2006) suggested that the livelihood of more than half of India's working population is concerned in agriculture and its allied behavior. Notwithstanding there being an augment in the amount of food grains being produced nationally as well as in the imports of food grains, India has been not capable to achieve food safety. The group most harmfully affected by this is women in agriculture: their contribution to farm labor is hardly documented; they are salaried badly and they suffer chronic energy deficiency. Population growth has distorted and-man ratio, which is further exacerbated by these section of holdings leaving with large figure of small and marginal farmers whose price of farming exceeds yield and return. For the bottom group, there is a vertical decline from 0.16 per cent per annum to -0.96. Even for the middle group per capita calorie intake according to the authors' estimates has declined from 0.40 to -1.76.

Stephen (2012) suggested that Trade theory shows that the effect of opening trade is to move domes-tic price ratios between goods into fairness with world price ratios.' Tariffs and other limitations on trade prevent domestic relation prices from equal world relative prices. In this paper a simple tool, namely implied exchange rates for tradable goods, has been used to inspect the personal property of economic policy on the dissimilarity between domestic and "free trade" relative price structures. The device can be practical easily in a country where relatively simple products are leading in production and trade, and it gives a scientific indication of the collision of various policy instruments. The results for Pakistan give an sign of the extent to which agriculture suffered and industrialist benefited from trade policy; the usefulness of the official ex-change rate as a guide to the value of foreign exchange or of importable or exportable goods; When non price trade restrictions are significant there need not be any correspondence between changes in tariffs or the exchange rate and changes in domestic prices of importable; and trade-restricting policies can have a considerable and measurable impact on the sharing of incomes in a country, chiefly in transfer resources from the exporting to the import rival sectors.

Johnston, (1999) Concerned with the objective of dipping poverty as well as enhancing growth has increased the options to be careful. The reply aligned with a narrow obsession with maximizing growth in GNP has led to quite general getting of the view that national development pains should be heading for explicitly at compound goal. In most developing countries there seems to be some degree of responsibility to four linked aims: achieving self-sustaining, economic growth; employment opportunities for a growing labor force. When we turn to the choice of supplementary events for promoting enhanced health and nutrition, the state of affairs is more discouraging. Some progress has been made in the direction of a consensus concerning the advantages of an integrated move toward as a means of achieving wider and more effective coverage; but there are few instances in which such efforts have gone beyond pilot or new programs. Specialists worried with health, nourishment, or inhabitants may give lip service to the idea, but in put into practice their hold is often negligible.

Mussadaq (2012) According to the survey, 57 per cent of Pakistanis are not in taking the same food that they did two years ago when the food disaster began. But what is even more disturbing is that 45 per cent of Pakistanis that Oxfam beam to said they forever had enough food to eat on a daily basis. By far, cost was the main be concerned with over half (51 per cent) of respondents in Pakistan, citing it as one of their top concerns. Twenty-eight per cent of people surveyed in Pakistan said they were concerned about the availability of food whilst 19 per cent of people said that healthiness or nutritional value of food they eat is also a key concern. The supply of food, must be improved in Pakistan. The government needs to undertake substantial agriculture reform and provide stronger land rights for landless poor farmers, provide the required fertilizers, seed and storage facilities needed so poor farmers can grow food and bring rising food prices under control. Oxfam's international GROW campaign and Pakistan's newly-established Dharti campaign are collaborating to ensure that everyone around the world always has enough to eat. The surveys for this report were carried out by international research consultancy Globe Scan.

Shah (2012), in the market today, prices of merchandise have augmented various. A laborer's daily salary is not even half of his daily cost. Medicine is highly priced and fuel prices beyond understanding. In Pakistan, an average child cannot afford to drink six clean glasses of water per day. Our monetary wizards must analyze the poorest 10% of the country's population and check how much of their budget is spent on food, to get the actual food price and to further appraise how many poor citizens in Pakistan are in point of fact falling below the poverty line. Institutions like World Bank are putting their due share to help countries like ours through programmers like Global Food Crisis Response Program, which is helping 40 low income countries through almost $1.5 billion in support. By working with World Health Organization and World Bank, we can further contribute to help feed our people as almost 22 million children are given food, medicine & basic life saving support. Instead of focusing on the world's most serious issue by fixing the CPI and reducing food prices, the government of Pakistan is busy elsewhere. We should be monitoring agricultural trade to identify potential food shortages right away, before we end up driving our poor people to the brink of the biggest disaster and leave countless hungry men women and children, breathless & starved.

Henry .Et,al (2011) the food rights campaigners warn the provincial governments of the country against food price inflation risking augment in empty plates amid fears of adding 30 million more to the mark of those living below poverty line. Act now to protect hungry and the poor from food insecurity, food vulnerability, land grabbing, and denial of women's right to land as it has a deep structural nexus with food security. The provinces should legislate to protect right of the people to food and admit women working in fields as farmers. A must ensure of food reaches to everyone who cannot afford to buy it from the market and do not let the market forces increase the prices of food for corporate greed. State is to check market excesses. It is important to control price hike with immediate effect.

Lewis (2007) The Group of 20 top economies will meet shortly to try and coordinate a response to soaring food prices, driven by drought and rising demand. The corn prices hit $8.90 a bushel, up on sharply estimates, with soybean at up to $15-17 a bushel, $2.00 more. Crops badly damaged, pushing yields per acre for corn to the lowest level since 1995 and, for soybeans, the lowest since 2003. The Financial Times concerns over the US harvest prompted senior G20 and United Nations officials to consider an emergency meeting on food supply. The need to establish a consensus so as to avoid a repeat of the riots and tensions sparked in 2007-08 by a spike in food prices.

Afzal (2012), suggested from 2007-08 through February 2011, food prices in Pakistan have increased by 81 percent, according to the official estimates. At the same time, the Food and Agriculture Organization's (FAO) Food Price Index, which measures international food price inflation, averaged 228 points in 2011. This present index value is 23 percent (42 points) more than in 2010, exceeding the previous high of 200 points in 2008, the highest level since the FAO started measuring international food prices in 1990.Scholars have linked the most-recent social unrest (the Arab Spring) in the Middle East and North Africa to sudden and steep increases in food prices. The authors of the paper further provide a threshold value of 210 of the Food Price Index, beyond which persistent and increasing food riots become a foregone conclusion. In many developing countries, political organizations are perceived to have a critical role in providing food security. The failure to provide this security, the paper argues, undermines the very reason for the existence of the political system. Once that happens, the ensuing protests can reflect a broad range of reasons for dissatisfaction while masking the actual trigger behind social unrest. Another major negative impact of rising food prices is the precipitous rise in poverty in Pakistan. In a recent report, the Asian Development Bank (ADB) calculates that a 20 percent rise in food prices increases the number of the poor by 4.5 percent through pushing an additional seven million people below the $ 1.25-a-day poverty line in Pakistan. By this calculation alone, the number of poor people in Pakistan has increased by about 30 million in the last four years.

Qaiser, et. Al (2011) suggested Kitchen gardening contributes to household food security by providing direct access to food that can be harvested, prepared and fed to family members, often on a daily basis. For this it is not necessary that you have a lot of space to grow fruits and vegetables in home. It is much easier to practice gardening on small patches of homestead land and in pots. Even very poor and landless people in urban and peri urban areas can practice gardening activities on roof tops in pots and can get very healthy produce. Thus, home/kitchen gardening at some level is a production system in which everyone can easily enter. In the present scenario, food inflation, use of sprays for pests, insects and use of sewerage water in peri-urban areas for vegetable production, the home gardening is the best option to minimize the harmful effects of commercially grown vegetables. Gardening is typically a family activity involving women, men, children and the elderly, with some tasks carried out separately and others jointly. For women it is a good and constructive activity which makes people self sufficient in the production of vegetables and fruits. A woman is responsible of kitchen, with the little effort they can contribute a lot for their family. Through kitchen gardening, they can get better quality food; it is also a learning activity, like different varieties of seeds, fertilizers, pesticides etc. They can enhance their skills and knowledge through such a great activity. People also learn about the diseases, quality of food, importance of organic food and their effects on health. Most of them are adopting it as a hobby and as a fun also. It is now a day symbol of healthy life style. It's a good source for sustaining healthy communities and their livelihood.

Research Question

Find out the relevant kitchen items prices

Comparison of prices increases and decrease from 2007 to 2008 and to 2012?

Has the high price affected the purchasing power of people and how are the alternatives they are using now?

What are the causes of the price rise?

The change in the trend of purchasing of packaged spices and ready to cook products?

How are national foods competing with its competitors?

Problem statement

The problem which we have focused upon is that the increase in price of food and kitchen item a has shifted the consumer to packaged masala's and salts such as national foods.

Research Hypothesis

The point of this study is to examine the influence of Population on Food Prices.

H0: Population does not have an effect on Food Prices

H1: Population does have an effect on Food Prices

The aim of this study is to compute the influence of availability of food items on Food Prices.

H0: availability of food items does not have an effect on Food Prices

H1: availability of food items does have an effect on Food Prices

The goal of this study is to evaluate the influence of natural disasters on Food Prices

H0: Natural disasters do not have an effect on Food Prices

H1: Natural disasters do have an effect on Food Prices

The point of this study is to determine the impact of inflation on food prices.

H0: inflation does not have an effect on food prices.

H1; inflation does have an effect on food prices

The goal of this study is to assess the role of stock hoarding on Food Prices

H0: stock hoarding does not have an effect on Food Prices

H1: stock hoarding does have an effect on Food Prices

The intention of this study is to evaluate the influence of imports and government regulations on Food Prices

H0: imports and government regulations does not have an effect on Food Prices

H1: imports and government regulations does have an effect on Food Prices

Research Methodology

Types of research

Two type of research methodology will b used; primary and secondary

Secondary data compromises of the second hand data available. In this I will do the literature review of articles, journals and research papers. This data will help me broaden my knowledge and this will be collected from Jstore and journals.

Primary research is carried out in order to find out something distinct. This is gathered by the direct interaction through interviews. Interviews will be conducted by interviewing various consumers and producers. Also questionnaires will be floated to get specific .So; all these sources would be of great help in compiling my research report. 30 Questionnaires will be filled on the topic, closed ended questions will be asked.


Convenient sampling: It is when we look for convenient way of sampling. The target audiences for the research will be from the specific are, i.e. the food sector. All the producers and the sellers of the food items will be targeted. Also the consumers of these items will be communicated.

Snowball Sampling: In snowball sampling, you begin by identifying someone who meets the criteria for addition in your study. You then ask them to advise others who they may know who also meet the criteria.

Data Analysis:

Regression analysis

2. T-statistics

3. Descriptive Statistics and Correlations

Data collected from the questionnaires will be gathered and organized in form of bar charts and pie charts etc. This helps in comparing the options for each question and draw conclusions based on option selected by most of the candidate. Regression analysis will be run through the answers of the questionnaires. Answers to open-ended questions are generally analyzed and concluded.

Tools for research

Literature reviews

Literature review will be expressing the important knowledge from scholarly articles and studies. Literature reviews will be focusing on previous studies conducted on food prices and a comparison of the years.


Interviews will be conducted of different people especially the users. Females and males both will be interviewed. Females who are house wives and are regular user of kitchen items and national foods products will be interviewed. Moreover shop keepers will be interviewed to see the fluctuations in the purchasing power. This will help us find out diverse opinions of people and highlight distinct features.


Also Questionnaires will be floated to get specific result of our findings. All these sources would be of great help in compiling my research report. 30 Questionnaires will be filled on the topic, closed ended questions will be asked.

Target population

shop keeper

house wives from SEC B

females from Sec C

Time Frame:

The time which is required to complete this research is till December. But I plan to finish the research by end of October.

All the answers to my findings shall end by September, and regression analysis will be conducted by October.

Therefore I plan to finish my research by October, so that I have time to make changes in it.


Tests of Significance of Regression, Parameters

The test statistic is based on 95% confidence rate, which is 1.96. If the t-statistic is greater than -1.96 but less than 1.96 on the two-tail test, we will reject H0. If the t-statistic is less than -1.96 and greater than 1.96, we will fail to reject H0. Where H1 is our alternative hypothesis and H0 is our null hypothesis.

Regression Summary

The questionnaires were coded into a five point likert scale form of 0s, 1s, 2s, 3s and 4s and a two likert scale of 0s and 1s. 0 meant strongly agree, 1 meant agree, 2 meant neutral, 3 meant disagree and 4 meant strongly disagree. This data was analyzed using SPSS statistical software. The questions were linked to the independent and dependent variables for further analysis. Linear regression analysis was done to analyze impact of independent variables on dependent variable. Test statistic was used as the main deciding rule to reject or fail to reject hypothesis. For descriptive statistics, the data was analyzed using IBM SPSS statistical software. For correlation analysis, same software IBM SPSS was used

Results of Parameter Tests of Significance

Population: The t-stat is -.201, which is less than +1.96, so we reject H0.This shows a good impact of population on the dependent variable Food Prices.

Stock hoarding: The t-stat is +1.110, which is less than +1.96, so we reject H0.This indicates a strong impact of stock hoarding on the dependent variable Food Prices.

Availability of food items: The t-stat is -0.568, which is less than +1.96, so we reject H0.This shows a significant impact of availability on the dependent variable Food Prices.

Imports and government regulations: The t-stat is -1.46, which is less than +1.96, so we reject H0.This indicates a good impact of it on the dependent variable Food Prices.

National foods and packaged masala's : The t-stat is -2.602 which fall outside the rejection region i.e. -1.96-+1.96 therefore we fail to reject H0 and say that the variable does not affect food prices

Natural disasters; The t-stat is+0.226, which is less than +1.96, so we reject H0.This shows that natural disasters does affect the dependent variable food prices

Inflation : The t-stat is -1.508 which is less than +1.96, so we reject H0.This indicates a significant impact of inflation on the dependent variable food prices

Mean, Median and Mode of Data

The descriptive statistics were calculated using IBM SPSS statistical software.

Mode for all the variables was different according to the response of the questionnaire but the overall mode is 0 which refers to "Strongly Agree". This means that most of the respondents agreed to most of the questions. The Median was 0, which refers to "Agree". If all the data was transformed in ascending order, the middle value of all the frequencies of all variables turn out to be 0. The mean however is different for all variables .

The variable population has a mean of 0.18 which is close to its mode and median. This means that it has a strong relationship between population and food prices. The mean of stock hoarding is 0.36 which is closer to the median and mode stating that many people agreed that an effective food prices; people strongly agreed to it. The mean of availability of food items is 0.26 which is closer to its median and mode .The mean of imports and government regulations is 0.32,the mean of natural disasters is 0.24 and the mean of inflation is 0.16.All of these are closer to the overall mode and median. The mean of national foods is 0.28 which is near from median and mode that is 0.00.

Correlation Analysis

According to the correlation table from SPSS statistical software, food prices and population have a 0.01 level of significant correlation. The variable stock hoarding with food prices has a 0.05 level of significant correlation with a positive relationship. T Correlations between independent variables also exist as evident from the table in Appendix. There is a 0.01 level of significant correlation between population and food prices which means that this software definitely will face resistance with a positive relationship. Another correlation is between stock hoarding and food prices with a 0.05 level of significance with a positive relationship

Analysis of Regression:



Sum of Squares


Mean Square

















Predictors: (Constant), Inflation, Natural Disasters, Stock Hoarding, Imports and Government Regulations, National Foods, Population, Availability of National Foods

b) Dependent Variable: Food prices

R square show that co efficient of determination shows that independent variables are explaining 68.9% of variation in the dependent variable. Also the high co efficient value shows that the model is strong. F statistic value is significant at 1 % which is considered to have a positive and strong weightage. The coefficient of determination shows that inflation, natural disasters, government regulation and imports, stock hoarding, national foods, population and availability of national foods Efficient have 68.9% percent of the variation in Food prices. The ANOVA table clearly states that the level of significance is 0.0207. Since this value is usually set at .05, any value less than this will result in significant effects, while any value greater than this value will result in non-significant effects. In analysis of the ANOVA table the P-value is 2%, which indicated there is a statistically significant relationship between the variables at the 98% confidence level.

The Regression line is as follows


Y= .912+.018X1+.0169X2+.207X3+.019X4+.055X5+.016X6+.161X7

X1: Population

X2: Stock Hoarding and Government Regulation

X3: Availability of National Foods

X4: Imports

X5: National Foods

X6: Natural Disasters

X7: Inflation

This explains that the co efficient value is 0.018X1 which shows that after controlling other variables the 1 point increase in the level of population will increase the impact of Food Prices by 0.018 (X1). Similarly the coefficient value of 0.0169X2 shows that after controlling for other indicators, the one point increase in level of Stock Hoarding increases the level of Food Prices by 0.0169 points. The coefficient value of the third variable that is Stock Hoarding (0.207X3) shows that after controlling other indicators, one point increase in level of availability of packaged masala's will increase the level of Food Prices by 0.201 points (or percentage). The coefficient value of the fourth variable that is Imports and Government Regulations (0.019X4) shows that after controlling other indicators, one point increase in level of Imports and Government Regulations will increase the level of Food Prices by 0.019 points (or percentage).

The coefficient value of the fifth variable that is National foods (0.055X5) shows that after controlling other variables , one point increase in level of National Foods will increase the level of Food Prices by 0.055X5 points (or percentage).

The positive and significant coefficient values of Natural Disasters (0.16X6) and Inflation (0.161X7) indicates a statistically significant impact on the level of Food Prices.

Findings of interview:

Shopkeeper : Riaz Malik

Location : Gujrat

From 2007 to 2008 the prices of food has been raising because of a lot of factors involved in Pakistan. Majorly the rise of prices is not just seen in food items but the overall inflation ahs rose due to government negligence. As a shopkeeper a lot of factors are hindering the situation as to the poor agriculture all the worldwide withdrawing consumption had lead less buyers more seller situation. Also with a lot of new eating habits and opening of new eating places, people prefer eating outsides their home rather than cooking food at home. Moreover with the political instability and the excise taxes and duties also has played a vital role in boosting these prices up. Whereas when I see the SEC c, they do not afford the restaurant. And their buying behavior has been affected. But still they consume. However they do not buy packaged masala's as if they believe in the original taste. As said by Riaz, " kahnay ka zaiqa nai rehta dabay ke masalo se" . This means that people have a perception that these packaged salts are not tasteful.

Working lady: Amina

Location: Lahore

According to the survey conducted from a working women, impact of rising food prices did not matter to them since all of these women are short on time and all these flavor enhancing masala's have helped make their job easier in a way with only adding these up accentuates flavor within no time. A working women cannot go all the way from her office to a store, park her car ,get to the store and get these spices individually crush them up mix them up ,it is more of a convenience to get a readymade masala. Working class really did not get affected with the rising food prices.


Analyzing the results of the research, all 7 variables have positive relationships with the direct variable. Six out of seven hypotheses were rejected, while one hypothesis was failed to reject. After analyzing the data, I have found out that the independent variables Inflation, Natural Disasters, Stock Hoarding, Imports and Government Regulations, Population, Availability of National Foods all has a positive relationship with the direct variable food prices.

The survey and questionnaires were distributed among the various people mainly the consumers and sellers of food products. The findings show all the seven variables did have a significant relationship with the dependent variable. Firstly, let us begin with the population the regression results show that population does impact food prices. The t-statistic value -0.201 shows that there is a positive relationship between food prices and population. Moreover, the readings done on the topic also gives a clear idea that population is a essential factor in the rise of food prices.

The next variable which was considered was stock hoarding. Stock hoarding as defines in the secondary data seems to be penned down in simple words as the edge or upfront ground which a shopkeeper or seller gains over it competitors in the same market and industry. The t-stat is +1.110 indicates a strong impact of stock hoarding on the dependent variable food prices. The individual which sustains hoarding of stock has competitive edges over others.

Availability of products is also an important variable. The regression result of t-stat is -0.568, shows a significant impact of availability of products on purchase behavior.

Imports and government regulation is also another variable which has been linked to have an impact on food prices. The regression result of -1.46indicates that there is a significant and good relation between the two variables. Imports and government regulation is vital for every country as it enables prices to rise or fall. Hence there is a lot of literature which supports the importance of good and proper channeling of Imports and government regulation.

Furthermore, the variable national foods and packaged masala's also determines what are the values and beliefs of different people. The t-statistic value turned out to be -2.602 shows that packaged foods do not affect the food prices. The reason is that majority of people do not purchase these masala's as of their own beliefs and perception. But when we interviewed working women they were in favor of purchasing these packaged masala's.

The next variable in consideration is natural disasters. The t-stat is+ 0.226, which shows that the natural disasters does affect the dependent variable food prices. The secondary readings also stress the fact of natural disasters.

The last variable I will be analyzing is inflation. Inflation governs how the prices rose. The t-stat is -1.508 showed that there was a significant impact of inflation on the food prices. A lot of respondents were of the concern that inflation formed a base for higher food prices.