Damn the free market system!
|The stock of raw nuts:|
Market boycott hurting Tanzania
Look, the animal, whatever its size and location, behaves in the same way; deciding who gets how much of what, who produces how much of what, who sells what to who, and how much of it. This clan has no respect for anyone however powerful. Even governments dance to its dictates. Don’t be fooled. Those sweet-sounding documents going by the name policy are just responses to market dictates. No one dares to challenge this animal unless they are suicidal.
The market calls our desire for things, the demand which, it tells us, is unlimited. Therefore to ration our demand, it introduced another relative called price – the money you pay to buy something. Basically, the price is meant to ensure not everybody gets what they need, because the market says, money is scarce.
So we are forced to buy just what our money can buy and keep dreaming of buying more. And we keep going back to buy the same quantity of the same things. The market calls this trade turnover- the many times you return to buy the same things- And, it means profit to those selling.
Price gives more to people who need less and less to people who need more because they cannot afford the price.
The market also dictates how much you will get from your products and who buys them. It is not a respecter of Kings or pauper. Both have to dance to their dictates. If in doubt, ask President John Pombe Magufuli of Tanzania. Last year, he decided that Cashew nuts farmers should earn more than the price the market offered. In a huff, he raised the price by 94 percent. The market walked away.
In the meantime, Agriculture exports slumped by more than 50 percent to US$554.1 million from $1.225 billion the year before. This, because Cashew nuts were not exported among other reasons. Talk of markets boycotting a supplier!
A Market’s boycott can push one to desperation because one has to sell what they produce to buy what others produce. And desperation tosses due diligence through the window. Or where it is still in the house, it is pushed to the back burner, making the seller vulnerable. The smart sellers coin some attractive slogans to market their produce.
How many times does your local supermarket advertise offers of one product or the other? How many times does it have promotions and other Slogans such as “Hurry while stocks last?” Take a keen look, the products are either near their expiry date or their sales were low due to stiff competition from their peers in the neighborhood.
In some instances, desperate sellers just deal with anyone who can take the stock away from them. Here Conmen take advantage and swindle the seller. Others promise to buy but just vaporize. This happened to Tanzania when a smooth-talking Conman entered into a contract with it to buy the Cashew nuts despite reservations by the Kenyan press about the ability of the alleged buyer.
Months later, the buyer has yet to come up with the money. The deal was tossed out of the window and Tanzania went back to the drawing board. The Stock is still gathering dust in Warehouses while new produce is about to hit the market.
Never joke with markets. They are unmitigated dictators. Venezuela’s Hugo Chavez and his successor Nicholas Maduro, learned that lesson the hard way.