[Very light posting as of late. I’m in the midst of a new – and very large – project. More on that soon.]
Inflation is up and this time, darn it, Beijing is serious about making sure things don’t get out of control. Arguably, of course, they already are: in November, food prices were up 18.2%, year-on-year. Some of this run-up is surely exacerbated by companies (some, state-owned) who choose to horde key commodities in anticipation that they’ll rise even further in price (fuel, for example). Fortunately, Beijing has made clear that it won’t tolerate that kind of business, and last month it specifically prohibited edible oil manufacturers from hoarding product as a means of running up prices.
The idea being, of course, that hoarding in an inflationary economy is only going to make things worse.
So, I take it as a less than positive sign that, today, Beijing instructed 36 of China’s largest cities to begin maintaining …
… a minimum 10-day reserve of food and cooking oil supplies, as part of its measures to ensure market stability during the current period of rising food prices.
In other words, as of today, there will be an additional thirty-six major buyers of food and cooking oil on the Chinese market, all with the mandate to purchase a ten-day supply of the listed commodities in sufficient volumes to supply hundreds of millions of people. Anybody want to guess how that’ll influence the December inflation statistics?
In other inflation-panic news, this morning Beijing announced that it would resume imports from six American pork producers that had been de-listed due to growth-factors fed to their hogs. I found the story on SCMP [subscriber only], where it’s depicted as a concession in the ongoing trade row between the US and China. I think it’s reasonable to assume, though, that there’s a far more pressing domestic reason for the shift.