Amani Mchungaji
Member
- Feb 12, 2016
- 7
- 8
Should sugar speculators be allowed to store sugar and wait for the price to rise before selling there stock?
Where exactly is the line between encouraging the business of speculation, and thwarting those conspiring to form cartels and defraud the public? This is an age old question. If a businessperson takes the risk and makes money they deserve the rewards. If a group corner the market, and profiteer irresponsibly without due considerations for humanity it is simply wrong and unacceptable. Open competition is the tonic that can drive prices either way depending on supply and demand. Fair trade in a free market must be the goal. But sugar (as is steel) is dumped on the international market at below the cost of production for many countries, due to protectionism and overproduction in other countries. The present perceived sugar bubble is the result of efforts to protect the domestic producers from this unfair trade and to expose those greedy speculators.
If the regulators cross the line and err on the side of overregulation to protect the public, the risks will become too great and the margins too small and the money will go elsewhere. Flood the market with cheap imports and the domestic producers will collapse. Get the balance right and domestic producers will invest, increasing production to meet the demand. Several of Tanzania’s neighbours are net importers of sugar and sugar supposedly in transit to those markets has found it’s way onto the Tanzanian market. Other sugar imported for specific use that domestically produced sugar is not suited to, has allegedly been dumped on the domestic market.
The president has asked for patience. His government is brazenly treading this fine line. The hoarders and smugglers, including the duty dodging false transit merchants will do all they can to derail this bold good intention.
The self reliance preached by the father of the nation is finally being revisited seriously, hopefully putting pause to the borrowing from those who lend with a greedy eye on Tanzania’s natural resources.
We all know how fickle the public can be in a pinch!
Faith and patience and a fair price will result.
The goal is an honest, efficient and profitable domestic sugar industry meeting the needs of Tanzanians and negating the need to import using those precious foreign reserves. This is achievable as long as the regulations are followed and a reasonable duty is imposed AND ENFORCED, on imports, and the dodgers and smugglers are stopped.
Where exactly is the line between encouraging the business of speculation, and thwarting those conspiring to form cartels and defraud the public? This is an age old question. If a businessperson takes the risk and makes money they deserve the rewards. If a group corner the market, and profiteer irresponsibly without due considerations for humanity it is simply wrong and unacceptable. Open competition is the tonic that can drive prices either way depending on supply and demand. Fair trade in a free market must be the goal. But sugar (as is steel) is dumped on the international market at below the cost of production for many countries, due to protectionism and overproduction in other countries. The present perceived sugar bubble is the result of efforts to protect the domestic producers from this unfair trade and to expose those greedy speculators.
If the regulators cross the line and err on the side of overregulation to protect the public, the risks will become too great and the margins too small and the money will go elsewhere. Flood the market with cheap imports and the domestic producers will collapse. Get the balance right and domestic producers will invest, increasing production to meet the demand. Several of Tanzania’s neighbours are net importers of sugar and sugar supposedly in transit to those markets has found it’s way onto the Tanzanian market. Other sugar imported for specific use that domestically produced sugar is not suited to, has allegedly been dumped on the domestic market.
The president has asked for patience. His government is brazenly treading this fine line. The hoarders and smugglers, including the duty dodging false transit merchants will do all they can to derail this bold good intention.
The self reliance preached by the father of the nation is finally being revisited seriously, hopefully putting pause to the borrowing from those who lend with a greedy eye on Tanzania’s natural resources.
We all know how fickle the public can be in a pinch!
Faith and patience and a fair price will result.
The goal is an honest, efficient and profitable domestic sugar industry meeting the needs of Tanzanians and negating the need to import using those precious foreign reserves. This is achievable as long as the regulations are followed and a reasonable duty is imposed AND ENFORCED, on imports, and the dodgers and smugglers are stopped.
