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Competition and struggle against cartels may resolve shortages
Belgrade,
7 October 2012
Deputy Prime Minister and Minister of Foreign and Internal Trade and Telecommunications Rasim Ljajic today said that the only proper and systemic way to fight shortages in the domestic market would be better competition, more foreign investors and fight against cartels.
Author:
Tanjug
Appearing on Prva Television, Ljajic announced that talks with representatives of the cooking oil industry will resume tomorrow to see what each of them can do.
He underlined that there are objective reasons for the current shortage of cooking oil and sugar because the drought incurred damages of around €1.5 billion, reducing the yield and causing a surge in prices much greater than last year’s.
The Minister said that this year’s sunflower yield dropped by 23%, but that there will be enough sunflower for domestic needs, including 80,000 tons for export.
Ljajic explained that the price of oil went up because the price of sunflower was increased due to the talks of the drought, and oil producers hurried to buy off sunflower at the price of around €500, even before the balances were done. Once the balances were completed, it turned out that there is enough sunflower, even for exports.
He said it is being contemplated that the Commodity Reserves purchase 20,000 tons of cooking oil at an international tender to help bring the price of oil down.
The Minister stressed that by introducing import taxes the government wants to protect domestic producers because it is questionable whether they would be able to bear the competition from outside.
The situation with sugar is not as bad as that with cooking oil because the price of sugar did not rise that much, he said, adding that it is also possible to import sugar and create competition, and that the decision on customs-free import forced the producers to bring the price down to its previous level.
In the days ahead we will see whether the decision on the customs-free import will be reflected on oil importers as well, Ljajic concluded.
He underlined that there are objective reasons for the current shortage of cooking oil and sugar because the drought incurred damages of around €1.5 billion, reducing the yield and causing a surge in prices much greater than last year’s.
The Minister said that this year’s sunflower yield dropped by 23%, but that there will be enough sunflower for domestic needs, including 80,000 tons for export.
Ljajic explained that the price of oil went up because the price of sunflower was increased due to the talks of the drought, and oil producers hurried to buy off sunflower at the price of around €500, even before the balances were done. Once the balances were completed, it turned out that there is enough sunflower, even for exports.
He said it is being contemplated that the Commodity Reserves purchase 20,000 tons of cooking oil at an international tender to help bring the price of oil down.
The Minister stressed that by introducing import taxes the government wants to protect domestic producers because it is questionable whether they would be able to bear the competition from outside.
The situation with sugar is not as bad as that with cooking oil because the price of sugar did not rise that much, he said, adding that it is also possible to import sugar and create competition, and that the decision on customs-free import forced the producers to bring the price down to its previous level.
In the days ahead we will see whether the decision on the customs-free import will be reflected on oil importers as well, Ljajic concluded.
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