Abdel Aziz Al-Sayed attributed the main reason for the unjustified price increase to the existence of an artificial shortage as major producers seek to compensate for the losses they suffered during 2022.
He added that high demand does not mean prices will increase at this pace, as the laws of supply and demand do not give producers the right to raise prices according to their whims. Rather, there must be strict control to prevent exploitation and monopoly of the market.
He confirmed that the highest price for a chick was 56 pounds, and the lowest price was 48 pounds, with the price of a ton of fattening feed reaching 20 thousand pounds, while the price of a ton of layer feed was 17 thousand pounds.
During his conversation with Masrawy, Al-Sayed asked, “Why did the price of a chick rise to 56 pounds, while its price only a month and a half ago was 26 pounds, which is the cost of its production?” Saying that this rise is unjustified amid the decline in feed prices and the absence of a shortage in production inputs, which should have led to price stability and not an increase.
He added that the artificially high demand for chickpeas was exploited illegally, which constitutes a serious distortion in the market and a monopoly.
Al-Sayed pointed out that banks provide the dollars needed to import chicks. Once payment is made and the invoice is sent to the bank, approval for import comes, unlike the situation in 2022, as it was difficult to provide dollars at this time.
He added that the state has taken measures to import poultry and chicks with the aim of controlling the market and stabilizing prices in order to end this crisis and mitigate its effects.
Al-Sayed expected that the onset of winter would lead to an increase in the cost of production due to the spread of epidemic diseases, affected by the rise in the costs of fortifications and the energy needed for heating, which would be reflected in an additional increase in prices, especially if the price of the chick continued at its same high levels.
Al-Sayed explained that the fair price for poultry on the farm is 82 pounds per kilo, and it is sold to the consumer at 92 pounds. As for eggs, their price is still high, reaching 163 pounds on the farm and sold to the consumer at 185 pounds.
Source: Masrawy
#Egyptian #chick #expensive #dollar #time
Analysis: Uncovering the Truth Behind Artificial Scarcity and Unjustified Price Increases
A recent news article shed light on the alarming issue of unjustified price increases in the market, with Abdel Aziz Al-Sayed attributing the main reason to the existence of an artificial shortage. As a renowned blog news writer, I decided to delve deeper into this matter and provide my analysis.
Artificial scarcity, as defined by <a href="https://www.reddit.com/r/AskEconomics/comments/181w378/whatisartificialscarcityandisitgoodor_bad/”>[2], refers to a situation where the output intentionally does not meet demand to keep prices high. This phenomenon is not about withholding products, but rather about controlling supply to maximize profits.
In the given article, Al-Sayed suggests that major producers are creating an artificial shortage to compensate for losses suffered during 2022. This manipulation of supply can lead to thriving aftermarkets, where products are resold at much higher prices, as observed in [1]. However, this practice can be detrimental to consumers, as it leads to unjustified price increases.
The laws of supply and demand dictate that prices should adjust to equilibrium levels, where the quantity of products supplied equals the quantity demanded. However, in the presence of artificial scarcity, prices can be artificially inflated, making it difficult for consumers to afford essential products. As Al-Sayed emphasized, high demand does not automatically justify price increases, and strict control is necessary to prevent exploitation and monopoly of the market.
The concept of price controls is discussed in [3], which highlights the importance of efficient allocation of resources. When prices are allowed to adjust naturally, they encourage an expansion of the quantity supplied, leading to a more efficient allocation of resources.
the article sheds light on the issue of artificial scarcity and its implications on price increases. It is essential for regulators to implement strict controls to prevent exploitation and ensure that prices reflect the true market equilibrium. As a society, we must be vigilant in identifying instances of artificial scarcity and work towards promoting fair market practices that benefit both producers and consumers.
Recommendations:
- Regulators should closely monitor market trends to identify instances of artificial scarcity and take necessary actions to prevent exploitation.
- Implementing price controls, as discussed in [3], can help regulate prices and promote efficient allocation of resources.
- Consumers should be educated about the concept of artificial scarcity and its implications, enabling them to make informed purchasing decisions.
By working together, we can create a fair and transparent market that benefits all stakeholders involved.
