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Friday, February 24, 2006

Buy Chicken: Part Doux

Moved on! Check TheCairoCalls

I asked readers before (at least the ones in Egypt) to cut it with this stupid boycott of chickens, as it is scientifically proven that eating chickens can not possibly cause human infection with bird flu. I also urged them to reconsider this boycott, as it is directly affecting the only source of income for thousands of families, and will inevitably force a lot of people out of their jobs.
Now, thanks to my good, economic-whiz friend El-Zeni Barakat, I have an even better reason to think that this boycott thing is stupid.
Here is what I understand: in 'normal' markets, demand and supply are closely related; when demand for something decreases, prices will go down, and manufacturers would be able to cut back on their production to limit supply and return prices to normal level, almost immediately. This happens all the time in nearly every market(free ones of course). Except for agricultural products and poultry. The reason? Supply can never respond immediately to changes in demand. So, when we boycott chicken under ignorant pretenses, suppliers have no way to cut back on their supply immediately (the chicken, the cow, or the vegetable is already there) What they can do however is to decide now to cut back on growing or breeding. This will affect the actual levels of supply 2,3, or 4 months from now. By then we would have forgotten all about the bird flu thing, and will be looking forward for delicious chickens, only to find out that there isn't enough supply, because 3 months ago the manufacturers were on the brink of bankruptcy. By this time we'll be faced with one of two situations: 1)A Chicken would cost 100 pounds!! (see why I wrote it with a capital C!), or 2)We'll have to import chickens in order to keep prices balanced, an option which I think we'll choose, and thus force the country deeper into trade-deficit land, and push the pound further down the drain.
And all of this because we are refusing to listen to reason, and opting instead to follow rumors and myths.
That's pathetic!

Moved on!

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