Wednesday, June 06, 2007

Inflation hits my lunchbox: 10% up


pork

Not only the stock market is (again) going up, also food prices. Today my lunch box (both pork and chicken) went up ten precent in price. A potentially dangerous move, since the competition among lunch box providers is very competitive in this part of Shanghai. For the time being we put up with it, too busy to be bothered by one Renminbi extra.
The Wall Street Journal looks at the ups and downs of the pig cycle in China:
"It's just like the stock market," says Guo Qiurong at her farm outside Beijing, which houses its pigs in long, low-slung concrete buildings. "If you can take the risk, you get in. If you can't, you get out. Once they start losing money, farmers just stop raising pigs."
China's pork prices generally tend to rise and fall in major cycles of three to four years; the last big surge came in 2004. (That this year's price spike comes during the Chinese zodiac's year of the pig appears to be a coincidence.) The pattern is now well enough established that farmers should, in theory, be able to smooth out the fluctuations. The main problem: bad information and poor planning that leads too many farmers to pull out of the market, or jump in, at the wrong time.
China is again heading for an oversupply of pork and dropping prices next year.

Update: The delivery boy only charged the old prices the the lunch box. Perhaps too much negative feedback.

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