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Market manipulation is a significant concern in the world of procurement and supply-chain management. According to Sharmah Seakar, a senior procurement lead at Efficio, a global consultancy specializing in procurement and supply-chain services, unethical practices can have far-reaching consequences. Seakar emphasizes the importance of maintaining integrity and transparency in all aspects of procurement to prevent market manipulation.
One common form of market manipulation is price-fixing, where competitors collude to artificially inflate prices and stifle competition. This can have a detrimental impact on consumers, as they end up paying more for goods or services than they should in a fair market. Price-fixing schemes undermine the principles of a free market economy by distorting supply and demand dynamics.
Another tactic used in market manipulation is the creation of artificial shortages. By limiting the availability of a product or service, manipulators can drive up prices and create a sense of urgency among consumers. This practice exploits consumer behavior and can lead to unnecessary panic buying. Artificial shortages are often created by hoarding or manipulating production levels to create an illusion of scarcity.
Market manipulation can also involve spreading false information or rumors to influence market behavior. This tactic, known as misinformation or disinformation, can be used to manipulate stock prices, commodity prices, or other market indicators. By spreading false information, manipulators can deceive investors and consumers, leading to market instability and unfair advantages for those perpetuating the misinformation.
To combat market manipulation, organizations must prioritize transparency, accountability, and ethical behavior in their procurement practices. Implementing robust compliance programs and conducting regular audits can help identify and prevent instances of manipulation. It is essential for procurement professionals to remain vigilant and report any suspicious activities to relevant authorities.
In conclusion, market manipulation poses a significant threat to fair and competitive markets. Organizations must be proactive in detecting and preventing unethical behavior to ensure integrity and transparency in procurement and supply-chain management. By promoting a culture of ethical conduct and accountability, businesses can help safeguard against market manipulation and protect the interests of consumers and stakeholders.