Market based economy or not? Paksitan’s suger cartel and Pakistan’s Judiciary

In a recent court hearing http://www.thenews.com.pk/top_story_detail.asp?Id=25148 Pakistan’s supreme court has asked the government of Pakistan to ensure the availability of suger at Rs 38 – 40 per kilo at every corner of Pakistan. As I have discussed in an earlier post, this intervention on behalf of judiciary will not allow the market forces to work properly and the suger market in Pakistan will suffer badly. The suger mills where the ex-factory price is very close to Rs $36 will find it difficult to obtain the suger cane supplies because the growers will not grow suger cane because they can’t get a good price for their produce. Unfortunately our beloved judges of Supreme Court does not know about the market fundamentals. Rather than pressing the government to announce a ceiling on the price of suger, they should have allowed the government of Pakistan to come up with some better solution. This is the responsibility area of administration that what policies they adapt to allow the market to move towards a long term equilibrium price rather than price ceiling or rationing which will be the death of this market in Pakistan. There is a lot Pakistan can learn from Mugabe’s Zimbabwe.