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Food Inflation Replies |
chestnutstime
Senior Poster
Joined: 24 Oct 2007
Posts: 89
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 Posted: Mon Dec 24, 2007 8:17 pm Post subject: |
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On 12/11/07, China's State Grain Administration's web site reported five Chinese government agencies, (the National Development and Reform Commission, the State Grain Administration, the Finance Ministry, the Railroad Ministry, and the Transportation Ministry, ) issued the Food Supply Emergency Act of 2007, that demand all Chinese city governments store at least 10-day's supply of food and edible oil in small packages immediately.
for those who can read Chinese, here is the story carried by China News Agency.
中国新闻网
中新网12月11日电 据国家粮食局网站消息，国家五部委发出通知称，京、津、沪等36个大中城市及敏感地区，地方储备中要确保可供市场10天以上的成品粮油应急储备，包括部分小包装成品粮油，以保证应急需要。
这份名为《国家发展改革委 国家粮食局 财政部铁道部交通部关于进一步做好粮油市场供应工作的通知》说，2007年以来，国内粮食市场基本平稳。近期，受多方面因素影响，小麦和面粉及南方销区的玉米出现不同程度上涨，特别是大豆和食用植物油价格涨幅较大，引起社会各方面的广泛关注。
通知强调要完善粮油应急预案。各地要进一步细化粮油应急动用方案，尽快明确应急粮油加工和供应定点企业，以满足粮油应急供应需要。京、津、沪等36个大中城市及敏感地区，地方储备中要确保可供市场 10天以上的成品粮油应急储备，包括部分小包装成品粮油，以保证应急需要。做好货源组织调度和小包装成品粮油的加工能力准备工作，保证成品粮油加工和供应。
小包装成品粮油储备可与加工企业和商业经营企业周转库存结合起来，由地方政府自行研究给予适当补贴。各地粮食行政管理部门要对成品粮油储备承储企业定期检查，确保数量真实、质量良好。
通知还要求，保证粮油市场供应，加强粮油市场监测，加强产销区合作，加强市场监管。
ChestnutsTime |
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
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| Posted: Wed Aug 08, 2007 10:26 am Post subject: |
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Speculates that food inflation is going to be passed to non-food items. John Mauldin also believes that domestic inflation will be tick higher during the 2H 2007 as YoY comparisons will be very tough. Quote from Mr. Mauldin's latest weekend article:
| Quote: | | "If you look carefully at the CPI figures (and tinker with the monthly numbers), you'll also discover that even if the figures average a 2% annual rate in the months ahead, the year-over-year headline CPI inflation rate will be pushing 4% by November. This is already 'baked in the cake.' Since Bernanke is clearly concerned with the inflation expectations of the public, as well as the Fed's credibility, that headline CPI figure may create some complications for cutting rates in the months ahead, unless resource utilization falls out of bed." |
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Economists at loggerheads over China inflation threat
Tue Aug 7, 2007 11:48PM EDT
By Jason Subler - Analysis
BEIJING (Reuters) - When Chinese Premier Wen Jiabao visited a market in May to signal his concern over a surge in pork prices, most economists agreed it was a temporary supply shock that would not have broader inflationary consequences.
After a second such trip by Wen over the weekend, some are less sure.
"China's inflation is getting out of control and the government is behind the curve," said Dong Tao, Asian economist with Credit Suisse in Hong Kong.
Pick up any local newspaper and headlines on rising prices for a gamut of food products compete for attention. Instant noodle makers have increased prices by up to 40 percent; fast food restaurants have started charging more; even fees for wedding banquets are set to go up soon in some cities.
The authorities are clearly worried, if not rattled. Inflation has been a source of unrest in the past, and policy makers have been quick to issue orders against collusion and price manipulation, calling the effort a "major political task".
Political considerations aside, the spike in annual consumer price inflation to a 33-month high of 4.4 percent in June has divided economists into two camps -- those who maintain the short-term supply-shock view and those who say loose monetary policy is creating the conditions for a broader uptick in prices.
By Tao's estimate, food prices will continue to rise over the next 12 months after jumping 11.3 percent in the year to June, as blue ear disease among pigs postpones a rebound in pork supplies until late next year and flooding hits the autumn crop harvest.
SPREADING LIKE WILDFIRE?
That will probably cause consumer price inflation to reach 6.5 percent by the middle of next year, and it could go as high as 8 percent if bad weather, disruption to the meat supply and higher commodity prices persist, Tao said in a note to clients.
To keep real interest rates from sinking too far into negative territory, the central bank could aggressively raise rates this year and next, he said, bringing the one-year deposit rate to 5.22 percent and the lending rate to 8.19 percent by the end of 2008, compared with 3.33 percent and 6.84 percent now.
While Tao's forecasts on inflation and rate rises are among the highest, some other economists agree that rapid expansion in money supply and strong consumer demand are pushing overall inflation into dangerous territory.
"Food price inflation in China mostly reflects demand expansion rather than transitory supply disruptions, in our view," Goldman Sachs economist Hong Liang said in a recent note.
Liang said that despite the fact that non-food CPI was growing only modestly -- 1 percent from a year earlier in June -- there was cause for alarm because of the speed with which price increases were being passed on from meat to other food items.
"The accelerated pass-through of price inflation from primary inputs to finished food products suggests that consumer demand is buoyant, which likely reflects the strong wage growth and positive wealth effect over the past year," she said.
"Therefore, inflation pressures will likely be quickly passed on to non-food items as well."
China is only a small exporter of food. But spreading domestic inflation, coming as prices of manufactured exports have started to rise after years of decline, adds at the margin to the global inflationary pressure that is pushing up interest rates in a number of major economies.
Liang reaches a similar conclusion to Tao: only decisive monetary tightening will keep overall inflation pressures in check, and any delay will increase the risk of a hard landing for the economy later on.
NO BIG DEAL
Economists polled by Reuters expect annual consumer price inflation in July to hit 4.9 percent, just shy of Liang's forecast of a 5.1 percent rise.
Some economists interpret price trends very differently.
Jonathan Anderson with UBS in Hong Kong said that even if CPI exceeds 5 percent in July, as some market rumors have said it will, the recent uptick in prices is little cause for concern.
By Anderson's reading, inflation has not yet spread from pork and eggs and shows few signs of doing so. As such, he sees little evidence of overheated demand, excessively loose monetary policy or economy-wide supply shocks.
"No matter how we look at the data, we still feel that the current CPI uptick will prove temporary, and that underlying inflation pressures are mild," he said.
Donald Straszheim with Roth Capital Partners in Los Angeles conceded that food price increases were spreading.
But he, like Anderson, saw an excess of supply in the economy, not a deficit -- meaning that inflation would probably ease over the coming year and that the authorities would be making a mistake to respond with draconian tightening measures.
"This is still not demand-pull inflation. It is a supply shock. Tightening policy won't create a single new pig and will do more harm than good," Straszheim said in a report. |
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rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
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| Posted: Mon Jun 11, 2007 10:38 pm Post subject: |
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(rational) Flipside of stockmarket | Quote: | | Savers earn 3.06% on 12-month certificates of deposit, meaning that after a 20% tax is deducted, the value of their money is failing to keep pace with inflation. |
CPI on the strong side:
http://www.cnbc.com/id/19057085
_________________
Today is the Tomorrow you worried about Yesterday! |
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rffrydr
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Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
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| Posted: Mon Jun 04, 2007 11:52 pm Post subject: |
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An update on food price inflation in China:
http://www.bloomberg.com/apps/news?pid=20601068&sid=ai94XcF5a0R0&refer=economy
| Quote: | Soaring food prices may push up inflation in the world's fourth-largest economy and stoke concerns about social unrest. Consumer prices rose 3 percent in April, touching the central bank's target ceiling for 2007.
China's inflation rate for May is due to be announced June 12. Food prices account for a third of the consumer price index.
Pork prices climbed 43 percent in the first three weeks of May from a year earlier, according to government figures. Egg prices surged 30 percent in April. |
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