ABSTRACT

The paper explored the change in consumption pattern and market potential of the readymade food in Pakistan. It employed data from Household Integrated Expenditure Survey (HIES) from 2011 to 2018 for estimating the expenditure share for twelve food groups. In addition, to explore the expenditure elasticities Quadratic Almost Ideal Demand System (QUAIDS) is being employed. The results indicated a change in consumption pattern towards high value and readymade food products from the traditional staple foods. Over the time, consumer acceptability and potential for high value food groups have increased, as the budget share for these being the highest among all the other food groups. Expenditure elasticities indicated consumers’ potential to considerably increase the demand of high value and readymade food products with a slight reduction in prices and increment in their incomes. Among all the other food groups, demand for readymade food products is expected to increase the most with a rising household’s income and price reduction. In a nutshell, Pakistan has an emerging market for value addition having tremendous growth potential to overcome domestic and international demand as well as generating millions of dollars of export revenue ultimately reducing the import bills. Consequently, government facilitation is required in terms of policies to support this growing buldge in demand that Pakistan can easily supply, especially those in which it still has edge over imports. One way of addressing the issue can be the construction of National Industrial Food and processing policy in the Pakistan. Though, the proposal for the formulation of the policy is still in its initial phase and requires a good amount of time. Whereas, tax breaks, provision of storage, modern pulping plants, modernized processing/ freezing technology, development of associations for industry coordination and standardization of food regulations and low cost packaging policy are some of the few recommendations to be considered in formulating the policy.