Stockpiling commodities to corner the market
24 Aug 2011 11:05 GMT
I know that a manufacturer, broker, or supplier of goods is not allowed to hoard those goods and corner the market? When does holding goods back from sale constitute hoarding? What is cornering the market?

Answered by

Sheikh Husayn al-Jabûrî, professor at Umm al-Qurâ University

The unlawful hoarding of goods occurs when commercial goods are withheld from sale at any time or place in order to cause the price of those goods to rise unnaturally above the normal market price. Islam forbids manipulating prices in this way. This prohibition is more acute when the commodity in question is an essential one, something that people need in order to live or to function normally.

Prices can be artificially inflated to many times their true market value through hoarding and stockpiling. This causes great hardship to people, especially those who cannot afford to pay.

This is why the Prophet (peace be upon him) said: "Only a sinner hoards goods." [Sahîh Muslim (1605)]

He also said: "Whoever interferes with the prices among the Muslims to cause those prices to increase, Allah has the right to seat him in a severe fire on the Day of Judgement." [Musnad AhmadMustadrak al-Hâkim (2/12-13), Mu`jam al-Tabarânî al-Kabîr (20/479-481), and Sunan al-Bayhaqî (6/30) – with a good (hasan) chain of transmission]

He also said: "Whoever hoards a commodity in order to raise prices the Muslims have to pay is a sinner for doing so." [Musnad Ahmad (8617), Mustadrak al-Hâkim (2/12) and Sunan al-Bayhaqî (6/30) – a narration which is strengthened to the grade of good by virtue of supporting narrations]

In one narration of this hadîth, there is the additional phrase: "…and Allah is free of any responsibility towards him."

These texts are clear evidence that Islam forbids cornering the market – buying up the supply of goods in the market to gain control over their supply and force people to pay extravagant prices for them. Hoarding goods is sinful, especially essentials like medicines, staple foods, and those things upon which people depend to earn their livelihoods, is sinful.

Some scholars consider the Prophet's prohibition to be a general one, meaning that stockpiling goods is a sinful practice at with respect to all merchandise, even for things that are inessential.

And Allah knows best

Source: Islam Today

-- Al Arabiya Digital