Trade: the basic need products also entitled to their own little crisis

Within a couple of months, sugar and flour’s prices skyrocketed as rarely before, overtaking the 50% rise at retailers. A kilo of sugar is currently costing 2600 ariary, practically 1000 ariary more than before the end of the year 2009. And as a matter of fact, the merchandise is going very seldom on grocery stores’ shelves . Flour’s case is even more precarious. Even though flour is not exactly a daily consumption product, bread is, so flour’s price increase is to be having consequences on bread’s price. The market is currently overloaded by cheap but poor and even doubtful quality products.  

Wholesalers and their professional union (GPGM) do not feel having any responsibility in this first need products’ crisis, and they are even displaying themselves as victims. They are blaming the violations of distribution processes, the ideal way to keep them clean. Some importers are directly supplying retailers and, by so doing, bypassing wholesalers. It does necessarily not explain the price rises. However, this breach in the system is actually a cause for problems within the distribution circuit. The importers in question are not able to sell the whole of their products out on the market. The risk margin is very restricted, and such thing is threatening the profession as well as the consumer, according to the wholesalers’ professional union.  

“One can short cut the endless price rise”, argued the GPGM.  Proposals are on their way to the Finance and Trade ministries. As an example, wholesalers are suggesting to refrain from collecting taxes from retailers, taxes to be replaced by a single 0.5% tax to be paid by retailers to wholesalers when the formers are being supplied. The latters will be in charge of fuelling state chesses. Would such kind of proposal be able to cast the economic crisis’ effects away, either on the national or international stage? Would it be the remedy against the combined ariary’s value drop and rising up international market prices?  

For the consumers’ unions’ federation, the reason to this bothering first necessity goods’ price fluctuation is historically based: “we made a sudden jump from a socialist system to a totally liberal one”. According to this hardly ever listened entity “controlled price freedom would be necessary since many products are still undisputedly monopolized”. Some governmental intervention is being called upon as a solution. “The Trade ministry must step in and control the prices… and since supplies are being retained, storage rooms ought to be checked up”. In clear, a hack of a debate is to be addressing the distribution circuit in this case and the whole of the economic system in general.