Every year during the wheat season, large piles/stocks of husk/chaff produced from the wheat crop is gathered and sealed with mud with the intention that they would sell it when its price would be up.
Please, tell me according to the Islamic Shari`ah if this item of animal food being collected/stocked with the intention of selling it whenever it would become expensive is right or wrong. Thanks, regards.
Wa `alaykum as-salamu wa rahmatullahi wa barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
2- Stocking goods with the intention of raising prices is monopoly.
3- But stocking them while being abundant in the market to sell them later, when their prices become higher, is not monopoly and obviously is not haram.
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
Stocking goods when it is abundant to sell it later is not haram, rather this is a rational thing to do. But storing goods with the intention of increasing its price in the market is a different thing.
The difference between monopoly and trade is great. In monopoly, you just hoard the goods to make prices go up.
In trade, you just buy it when it is cheap because it is then abundant and sell it later when it becomes not so abundant in the market. This is in fact a service you make for the consumers.
Allah Almighty knows best.
Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.