Economic News

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I love this portion of news

And i think that 's not bad idea for you to know about future of economy specially with this new sanctions and developments in Iran and the world

Till boss is asleep this topic 'll be here

but i don't know what she 'll do with this topic when she comes here

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Dawn Editorial
Monday, 19 Oct, 2009

The report rightly points out that the nature of the sugar crisis has more to do with the unavailability of the commodity rather than its price. –Photo by APP

Price controls do not work. Rather they create shortages and encourage anti-competitive practices at the expense of consumers. Also the price of a particular commodity cannot be linked to its cost of production. The price of any given commodity is determined by the demand and supply situation in the market. The shorter the supply, the higher the price, and vice versa. That is precisely what the commission appointed by the Supreme Court to determine the production cost and profit margins in the sugar industry has suggested in its report. The report rightly points out that the nature of the sugar crisis has more to do with the unavailability of the commodity rather than its price. It also blames the Punjab government’s crackdown on millers last August with a view to bringing down the rising prices. The result was predictable: the product just vanished from the market causing hardship to the very consumers the government wanted to protect

The report is also critical of the federal government for fixing a maximum price ceiling because this step violates the country’s anti-competitive laws and indirectly validates cartelisation in the industry. It has correctly recommended that the free trade of sugar be allowed to provide a level playing field to all stakeholders and protect the interests of the consumers. Indirectly, the commission has suggested that the Supreme Court withdraw its order fixing the retail sugar price at Rs40 a kilo and let market forces determine the price according to the demand and supply situation.
But no market is perfect. There are always players — hoarders and black-marketers — who are ready to grab any opportunity to distort the market to maximise profits. That is where governments need to intervene and take effective administrative action to prevent such elements from playing havoc with the market. It is also advisable for millers to shun their old practice of forming cartels to artificially raise prices and distort the market. It only makes them more inefficient and non-competitive. There is no alternative to competitive markets if the objective is to protect the interests of both producers and consumers

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• OCTOBER 19, 2009, 2:00 A.M. ET

MOSCOW (Dow Jones)--Russia, Venezuela and Iran have proposed replacing the dollar as the currency for oil transactions, Venezuelan President Hugo Chavez was quoted as saying by a Prime-Tass report.

"We have discussed this matter within OPEC, and several countries, including Venezuela, Russia and Iran, have also proposed this idea," Chavez said in Bolivia Saturday, according to the report.
On Oct. 6, the Independent newspaper reported that a number of the world's biggest oil producing countries were planning to denominate oil transactions using a basket of their own currencies instead of the dollar.
The report was refuted by top officials from several countries, including Russian Deputy Finance Minister Dmitry Pankin.

Newspaper Web site:

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-By Moscow Bureau, Dow Jones Newswires; +7 495 937 8445

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10.19.09, 08:02 AM EDT

SUGAR/CZARNIKOW/ (URGENT):Sugar prices seen up, tight Brazil supply-Czarnikow

LONDON, Oct 19 (Reuters) - Brazil's sugar supply outlook is set to tighten after heavy rainfall, suggesting that prices will rise, consultancy Czarnikow said on Monday

"While the 'sugar story' has so far focused on the fall in Indian production, and India's need for imports, the next step up will be all about the fall in the Brazilian production outlook," Czarnikow said in its latest monthly review

Czarnikow has cut its forecast for 2009/10 centre-south Brazil sugar output to 28.2 million tonnes, from a previous prediction of 29.2 million, after output of 26.7 million tonnes in 2008/09, said senior analyst Peter De Klerk
.The drop was due to reduced throughput at mills after the heavy rains which harmed yields
Raw sugar prices more than doubled this year after India, the world's biggest consumer, shifted to a net importer from exporter
Now the focus of the sugar market has shifted to Brazil, the world's top producer and exporter, which has had persistent and excessive rainfall during harvesting

It is becoming increasingly clear that Brazil is not going to be able to support these levels of demand during the off-crop period, even though the industry has clearly tried to maximise sugar production," London-based Czarnikow said

."Limits on supply require a forced adjustment of consumption," the consultancy said
."To this end it is clear that prices will need to move higher to ration demand"
. Czarnikow said the sugar market faced a supply bottleneck
"By mid-August sugar production was running almost 3 million tonnes ahead of the previous year though this has fallen back to just 1.7 million tonnes," it said

"As the centre-south of Brazil has already exported a further 3 million tonnes this season to the end of September, total availability for October onwards is unlikely to exceed 7 million tonnes, allowing for domestic consumption."
Czarnikow added, "There simply will not be enough sugar to meet ongoing levels of demand."
The consultancy said that with the harvest in the centre-south of Brazil now coming to an end, hedging pressure and export availability was set to tighten sharply. (Reporting by David Brough; editing by Anthony Barker)

Copyright 2009 Reuters