Right at our doorstep, we are facing a sugar shortage.
Just as what we learnt in market equilibrium topic two weeks ago.
Because of the shortage, the sugar price rises to eliminate the shortages.
What could be the reason??
Too much demand or too little supply..??
This is Economics-in-action,
Our suppliers told us they had run out of stock as the factory was shut down for maintenance. If this continues, our operations will be affected and we will have to bear a higher cost of production if we want to remain open," he said.
The wholesale price of sugar, he said, had soared a fortnight ago from RM64 to RM69 for a 50kg sack.
http://www.nst.com.my/Current_News/nst/Monday/National/20060508073732/Article/index_html
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8 comments:
in this case..i have to say,its bcoz of too little supply..
The sugar shortage was caused by certain parties hoarding the sugar in attempts to push up the price. It has since been certified that there is an adequate supply of sugar for the whole country.
“In fact, there is slightly more supply than demand for sugar at the moment,” quoted Domestic Trade and Consumer Affairs Minister Datuk Mohd Shafie Apdal.
The recent burning of sugarcane plantations in Australia and the increase in the use of sugarcane for bio-fuel in certain countries had forced the international price of sugar to rise. The rising prices of sugar elsewhere could also lead to the attempt by irresponsible parties in Malaysia to smuggle the item overseas.
The Government is determined to put a halt to sugar hoarding and have at this moment already seized 367,210kg of sugar and compounded retailers a total of RM29,350 for various offences to do with the sugar incident.
err..
can the firms control the price of sugar just like the Arabic countries control prices of fuel?
they might purposely control the price..they want the price to rise and they can make more profit..
So this mean it is too little of spuuply and the demand is still the same. but i think that is not a problem for consumer because the price is rise in a very small amount only. each kg just rise RM0.10 only.
i think the rise of sugar dont really affect the consumers...
its an inelastic good... right wizzerd???
:)
Shortage happen when there is too many demand and less supply.
shortage is not cause by more demand then supply meh?
anonymous: not just the lack of supply, the high price could also be attributed to excessive demand
penangites: thank you for your interesting article, hoarding by irresponsible parties could be the reason of 'artificial' shortage.
feeling: the sugar suppliers are not as powerful as the oil barons yet, maybe it could happen in the future if sugar is as scarce as oil.
zaf ronaldo & edwin: that's right, demand for sugar is inelastic, it's quite insignificant, representing a tiny portion of our budget.
green apple: yes, too much demand and/or too little supply. The market forces will puch the price up.
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