Rice: the state willing to lower prices whatever it takes

Neither the repression threats nor the HAT´s propaganda were able to lower rice prices, the main food commodity is paramount for the Malagasy people. For the first time ever, one kilogram costs 2000 ariary, whereas it was stabilized between 1200 and 1400 ariary in 2010. The HAT is immediately blaming some distributors arguably retaining supplies either to make more profits or to piss the population off on political incentives.  

So, private traders would now be the ones arguably plotting against the innoncent HAT which, therefore, failed to control rice price fluctuations. Actually, the more Andry Rajoelina and his authority are pressuring distributors, the higher prices do rise. There is definitely no real shortage, but a significant slow down of supplies which happen to be omens for rises. The HAT decides to strike back through a partnership with a private trader. Some 1600 tons of rice are expected to be put on Antananarivo´s markets. An1300 tons are being expected within a couple of weeks later.  

This state rice will be sold for 1180 ariary per kilogram, doing more is impossible due to limited stocks. The HAT is likely to recreate queueing lines in front of grocery store providing “low price rice “. The public authorities´ repeated threats are drawing an increasing number of grocers to refrain from getting rice supplies. “We have to buy 1800 ariary from wholesalers, we will be compelled to sell at least 1900 ariary per kilo. But now that we are to be controlled… “, explained a grocer who has been quitting selling rice since February´s second week. Such a gap on shelves happens to be an prelude to shortages.  

Andry Rajoelina ordered the ministers concerned by this issue to find a solution quickly and to lower rice price… within a week. For the time being, the implemented strategy is” state lead imports deemed to supply markets and keep prices down, if ever possible “, according to the Director of home Trade. He equally outlined that fruitfull storage facility searches are, for the time being, merely leading to a state warning for distributors retaining supplies. 

Is the state likely to flex muscles enough to compell wholesalers and traders to lower rice prices? The answer is Yes it is. The year 2005´s  law on free competition is actually limiting free trade prices for the sake of mastering any virtual inflation. The government is able to intervene in case of monopoly or supply difficulties, but only over six months. Andry Rajoelina once promised rice for less than 1000 ariary per kilo as he was persuading the crowd to reverse an elected president. His economic propaganda has so far been proving fat lies. Imposed prices would be a significant boost before the elections.