1. Law of Demand in the news
By Mr. Manish Tripathi
1st year , Master of Information Management
Thakur Institute of Management Studies and Research
(Sunday, 2nd August , 2015)
2. #1
Increased Dairy Supply, Steady Demand
Lead to Drop in milk Prices in USA
JANUARY 23, 2015 , Farm Journal, Inc.
3. Increased Dairy Supply, Steady
Demand Lead to Drop in Prices in USA
• Milk prices at the farm level in 2015 are expected to be about
$6 a hundredweight lower than the record prices in 2014.
• Dairy tends to go from high prices to high prices in about
three years; then go from low prices to low prices in about
three years.
• 2015 is the third year down. Fantastic profitability in 2014
with falling feed prices, great milk prices at the farm level and
dairymen made a lot of money.
• When producers see that kind of profitability, they tend to
expand both number of cows and milk production per cow.
4. Increased Dairy Supply, Steady
Demand Lead to Drop in Prices in USA
• Cow numbers are 0.9 percent higher than a year ago and milk
per cow is 2.4 percent higher. There are more cows producing
more milk per cow and suddenly U.S. milk production is growing
3.4 percent.
• That is about twice what the U.S. market can consume, so prices
will fall over time and the herd will contract.
• The U.S. economy is growing relatively slowly, it depended on
fast-growing exports to keep milk prices high the last few years.
It has started to see low growth in a lot of the emerging markets;
China has backed off as a major importer.
• New Zealand and Europe have extra milk to sell because of the
sanctions against Russia.
5. #2
World is running out of chocolate because demand in
China is outstripping cocoa bean production and forcing
prices up
19 April 2014, Mail Online , UK
6. World is running out of chocolate because demand in
China is outstripping cocoa bean production and
forcing prices up
• The price of chocolate could soar over the next few years as
surging demand puts further pressure on the global cocoa crisis
– and experts predict the demand could become unsustainable
by 2020.
• In March, cocoa prices reached a two and a half year high at
£1,896 per tonne in London and US$3,031 per tonne in New
York.
• Most cocoa farms are situated along the west coast of Africa –
where many farmers are said to be living off less than $2 a day.
• A growing taste for chocolate in Asia – particularly in China –
means cocoa farmers will need more help to provide a greater
amount to export or manufacturers will be forced to use less
cocoa in their products.
7. World is running out of chocolate because demand in
China is outstripping cocoa bean production and
forcing prices up
• It is predicted chocolate prices will soar to keep up with the
rising demand – otherwise consumers will increasingly be
offered products filled with substitutes, such as nuts and fruits,
to ‘pack out’ chocolate bars.
• It is estimated that the growing demand for cocoa will be
unsustainable by 2020, unless more is done to help cocoa
growing communities.
• Mondelez International – a multinational confectionery, food
and beverage conglomerate – said it had pledged to invest more
than $400 million to help ease the crisis.
• Over the next ten years, it is set to pump millions into Ghana,
Ivory Coast, Indonesia, India and the Dominican Republic to help
improve the productivity and life of cocoa farmers.
8. #3
Select pulses drop on easing demand,
rising supply
July 28 , 2015 , Business Standard
9. Select pulses drop on easing demand, rising supply
• Select pulses led by moong drifted up to Rs 100 per quintal at
the wholesale pulses market .
• Demand from retailers at prevailing levels eased against
adequate stocks.
• Traders said fall in demand from retailers at current levels and
adequate stocks on higher supplies from producing belts mainly
pulled down select pulses prices.
• In the national capital, moong and its dal chilka local moved
down by Rs 100 each to Rs 6,500-7,200 and Rs 7,300-7,800 per
quintal, respectively.
• Moong dal dhoya local and best quality followed suit and traded
lower by a similar margin to Rs 7,300-7,600 and Rs 8,100-8,200
per quintal.
10. #4
Fall in Gold Price; Demand to Rise
July 26 , 2015 , Indian Express
11. Fall in Gold Price; Demand to Rise
• There is sharp decline in gold prices to nearly 5 year lows. On
Saturday, gold price increased by Rs 350 regaining its
physiological mark of Rs 25,000 per 10 gram.
• Prices have come down by around 10 per cent since January.
• Rates are likely to decline to touch Rs 20,500 per 10 gram in
India from the current levels if the US Federal Reserve effects a
rate hike.
• Consumers and investors are tempted to accumulate the yellow
metal due to this steep decline.
• Pradeep Sen of Sen Jewellers says, “In the last couple of days,
the sharp fall in rate has resulted in an improvement in footfalls
at our stores. In this rather dull period, we hope attractive prices
will draw more buyers.”
12.
13. Conclusions
• Law of demand is a universally acceptable and true law.
• The law of demand states that other factors being constant (cetris
peribus), price and quantity demand of any good and service are inversely
related to each other.
• When the price of a product increases, the demand for the same product
will fall. When the price of a product decrease, the demand for the same
product will rise.
• The price – demand is always affected by other determinants , mostly by
supply.
• Managers must keep a close eye on the factors affecting the demand and
price of product and services produced by their organization and take
proactive and corrective measures in case of any changes.
• Managers should plan to offer substitute products and services in case the
availability of raw materials , input components , etc. is affected.
• Otherwise, if they are off guard ; then even a small change may affect
their business and even throw them out of business.
