In China, the "green diet" suddenly is not so healthy and harmless. At least your wallet is "damaged" by it.
As floods have limited agricultural production, vegetable prices are soaring. In July, the price of vegetables rose by 22% year-on-year, prompting the Chinese government to require cities to set aside land for the expansion of vegetable cultivation and requested banks to increase loans to vegetable farmers. Prices are not only vegetables: grain prices have risen by nearly 12%, and egg prices have risen by almost 8%.
Wheat at the end of August also felt the same price increase pressure throughout Asia. In Indonesia, for example, food prices rose by 13.2% in August from a year earlier. At present, the economics community holds an optimistic attitude, but the rise in food prices poses a threat to consumer spending, which is a key link in Asian economic recovery.
Asians now consume more than ever before. From the real retail sales index of non-Japanese regions in Asia compiled by HSBC, their consumer spending in food, automobiles, household appliances, etc. only experienced a slight drop in October 2008, and now is lower than November 2008. Increased by 26%. This increase was far faster than the previous years and played an important role in economic growth. In 2009, personal expenses accounted for 36% of China's total GDP and 57% of India's GDP.
However, a large part of the Asian family’s income is spent on food. In Indonesia and the Philippines, food consumption accounts for half of the household budget and over one-third in China and India. As soon as food prices rise, people will be under great pressure. Rising prices will also affect the economy as a whole, as workers will demand a raise, and the budget of the national government that provides subsidies for food prices will also be affected.
The uncertainty lies in the next direction of food prices. The turbulent futures market does not provide any meaningful short-term guidance. Due to concerns about Russia's production shortage caused by the fire in late July, wheat as a commodity increased its price by more than 20% within a few days, and then fell back at about the same rate. However, the price of wheat is now rising again, and since the flood has taken away a large portion of the rice crop in Pakistan, rice prices have already increased significantly. Pakistan is the third largest rice exporter in the world.
The increase in Indian food prices has already fallen by nearly half from the high of 20% in December last year. Even so, the central bank has been forced to raise interest rates, at least in part to cope with soaring food prices. In China, the situation is getting worse. China’s consumer price index rose by 3.3% in July, but food prices rose by 6.8%.
What is currently certain is that China needs more vegetables, whether it is for people's health or economic health.
As floods have limited agricultural production, vegetable prices are soaring. In July, the price of vegetables rose by 22% year-on-year, prompting the Chinese government to require cities to set aside land for the expansion of vegetable cultivation and requested banks to increase loans to vegetable farmers. Prices are not only vegetables: grain prices have risen by nearly 12%, and egg prices have risen by almost 8%.
Wheat at the end of August also felt the same price increase pressure throughout Asia. In Indonesia, for example, food prices rose by 13.2% in August from a year earlier. At present, the economics community holds an optimistic attitude, but the rise in food prices poses a threat to consumer spending, which is a key link in Asian economic recovery.
Asians now consume more than ever before. From the real retail sales index of non-Japanese regions in Asia compiled by HSBC, their consumer spending in food, automobiles, household appliances, etc. only experienced a slight drop in October 2008, and now is lower than November 2008. Increased by 26%. This increase was far faster than the previous years and played an important role in economic growth. In 2009, personal expenses accounted for 36% of China's total GDP and 57% of India's GDP.
However, a large part of the Asian family’s income is spent on food. In Indonesia and the Philippines, food consumption accounts for half of the household budget and over one-third in China and India. As soon as food prices rise, people will be under great pressure. Rising prices will also affect the economy as a whole, as workers will demand a raise, and the budget of the national government that provides subsidies for food prices will also be affected.
The uncertainty lies in the next direction of food prices. The turbulent futures market does not provide any meaningful short-term guidance. Due to concerns about Russia's production shortage caused by the fire in late July, wheat as a commodity increased its price by more than 20% within a few days, and then fell back at about the same rate. However, the price of wheat is now rising again, and since the flood has taken away a large portion of the rice crop in Pakistan, rice prices have already increased significantly. Pakistan is the third largest rice exporter in the world.
The increase in Indian food prices has already fallen by nearly half from the high of 20% in December last year. Even so, the central bank has been forced to raise interest rates, at least in part to cope with soaring food prices. In China, the situation is getting worse. China’s consumer price index rose by 3.3% in July, but food prices rose by 6.8%.
What is currently certain is that China needs more vegetables, whether it is for people's health or economic health.
Rushan Jinguo Food Co., Ltd , https://www.jinguofood.cn