> In case of honey, the General Foods of the world would be able to make their
> multi-million dollar purchases at an even lower price than they pay now.
> Before you scream, on the other end the producers should collect more!  It
> is the middlemen who get hurt, by being cut out.

True, there will still be middlemen of sorts -- the auction site, the escrow and
freight forwarding people, and the banks that write the letters of credit.
However, these people are not speculating on the product and manipulating the
market.  They work for competitive fixed fees or commissions.

Price decisions in such a market are determined solely between the buyers and
sellers, all acting independently and trying to get the best deal.  Speculators
can get involved too, and that is good, however, it would be very difficult for
anyone to corner the market or control a large part of it, as -- I am told --
some traders and groups of traders may actually have been attempting in recent
times.

If a significant portion of world honey is made available for open trade at
publicly published prices, some people will still sell too cheap or buy too
high, but individual pressures and needs will regulate the flow.  This will,
over the long haul, result in prices that more often represent true production
costs, risks and necessary profit.

With prices moving much more quickly in response to market realities, prices
will also reflect supply and demand much more realistically, encouraging
consumers to adjust their use of honey.  When bulk prices drop, consumers will
immediately be able to take advantage of lower prices, consume more, and
eliminate the surplus quickly.  When the surplus is gone, then the prices will
climb and consumers will either adjust their consumption, or prices will again
climb as high consumption creates a shortage that results in higher prices, and
then, ultimately more supply and so on...

Currently, middlemen take advantage of huge spreads between producer price and
consumer prices.  These spreads are due to the large distances, language
barriers, government regulations, monetary differences, information shortfalls,
and suspicions between producers and consumers.  This middle ground is the
province of the middleman who specializes on understanding all these obstacles
and either overcoming them or turning them to his advantage.  Reducing or
eliminating any or all of these barriers to trade reduces the spread.  Both
consumers and producers benefit.

Open trading will place smaller buyers worldwide on a more even footing with the
larger operators.  Open trading will make  opportunities for other players in
supporting businesses like freight forwarding and import/export to get involved
in what is currently a rather occult and dangerous business to non-insiders.
Increased opportunity to trade openly and competition will necessarily reduce
the amount of money that goes to those who only deal in honey, while increasing
the security of those who produce, package and consume honey.  As I see it,
anyhow.

Let's hope now that electronic grocery buying at a retail level will somehow
break the stranglehold that a few large operators have in each regional grocery
market to allow the same kind of free market for the packers who buy and
distribute our product.

allen
(no sig today)