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Big capital is playing Chinese goods market 'like teasing a monkey'
By Wan Lixin |
May 19, 2010, Wednesday
|
Print Edition
Print Edition
IN rural north Jiangsu Province, a well-known delicacy is huangfen, a kind of tofu made from mung beans.
Peddlers with shoulder-pole baskets of huangfen thread their way through the village lanes, crying their wares.
The prospect of steaming huangfen eaten with sauce mixed with mashed garlic and fine shreds of pepper makes the mouth water.
According to news reports, all three ingredients in this treat - mung beans, garlic and peppers - are soaring in price, due to speculation by big capital.
According to Beijing Xinfadi wholesaling market, one of the capital's three largest markets, garlic has hit 10.6 yuan (US$1.60) a kilogram, 14 times more than 0.7 yuan a kilo in the same period last year.
Similarly, the price for mung beans jumped from 6 yuan a kilo last year to the current 22 yuan per kilo - it's more expensive than pork.
Big speculators are hoarding them, and then pushing the price to a dizzy level before releasing their stock.
Some say money and capital fleeing the property market are seeking new prey.
According to one businessman in Dongguan, Guangdong Province, considerable international capitalists are working with local partners in hoarding mung beans and garlic, steadily pushing high the price.
Common sense would suggest the growers, retailers and wholesalers would be among those who profit. That's not true.
In this game of sudden surges and sudden plunges, peasants who grow the garlic, its wholesalers and retailers are all victims.
Take small wholesalers and retailers. The sudden fluctuations in price would scare many wholesalers and retailers away from the market.
The only ones who stand to profit are the invisible capitalists big enough to monopolize the market.
One businessman said that big capital are playing the Chinese bulk goods market as if they are "teasing a monkey."
To think that pungent bulb many Shanghainese choose to stay away from has outperformed stocks, property and even gold.
This may be a demonstration of the confidence of predatory speculators.
They are showing that they need not be very discriminate about their prey.
When national wealth becomes so concentrated in the hands of a few speculators in so short a time, this concentration will naturally accelerate.
"South Weekend" Website recently conducted an online survey asking if Netizens have faith in the latest round of control measures aimed at depressing soaring home prices.
About 46.5 respondents said the price will surge again after a short respite, and another 45 percent say they are indifferent, because they cannot afford housing even if the price stabilizes.
But not so many can be indifferent to garlic prices.
This garlic issue can be understood in a bigger context.
Yao Jian, a spokesman for the Ministry of Commerce, said on Sunday that China's capacity to price commodities in the international market is almost non-existent.
He said while the price of steel per ton has increased from 2,000 yuan in 2002 to 4,400 yuan today, the iron ore price has soared from less than US$30 to US$150 per ton during the same period.
A Morgan Stanley researcher said the bank would always forestall by buying up whatever China intends to buy.
When another investment banker Goldman Sachs began to acquire some pig-raising farms in China December 2008, not a few people worried that so dignified a name might be tarnished by the stench of pigsty.
We know now that it is the other way around.
Unlike Foxconn, which has to apologize repeatedly for a recent spate of suicides by employees, investment bankers are still flying high, their analyses eagerly sought by policy makers, economists and naive reporters.
Peddlers with shoulder-pole baskets of huangfen thread their way through the village lanes, crying their wares.
The prospect of steaming huangfen eaten with sauce mixed with mashed garlic and fine shreds of pepper makes the mouth water.
According to news reports, all three ingredients in this treat - mung beans, garlic and peppers - are soaring in price, due to speculation by big capital.
According to Beijing Xinfadi wholesaling market, one of the capital's three largest markets, garlic has hit 10.6 yuan (US$1.60) a kilogram, 14 times more than 0.7 yuan a kilo in the same period last year.
Similarly, the price for mung beans jumped from 6 yuan a kilo last year to the current 22 yuan per kilo - it's more expensive than pork.
Big speculators are hoarding them, and then pushing the price to a dizzy level before releasing their stock.
Some say money and capital fleeing the property market are seeking new prey.
According to one businessman in Dongguan, Guangdong Province, considerable international capitalists are working with local partners in hoarding mung beans and garlic, steadily pushing high the price.
Common sense would suggest the growers, retailers and wholesalers would be among those who profit. That's not true.
In this game of sudden surges and sudden plunges, peasants who grow the garlic, its wholesalers and retailers are all victims.
Take small wholesalers and retailers. The sudden fluctuations in price would scare many wholesalers and retailers away from the market.
The only ones who stand to profit are the invisible capitalists big enough to monopolize the market.
One businessman said that big capital are playing the Chinese bulk goods market as if they are "teasing a monkey."
To think that pungent bulb many Shanghainese choose to stay away from has outperformed stocks, property and even gold.
This may be a demonstration of the confidence of predatory speculators.
They are showing that they need not be very discriminate about their prey.
When national wealth becomes so concentrated in the hands of a few speculators in so short a time, this concentration will naturally accelerate.
"South Weekend" Website recently conducted an online survey asking if Netizens have faith in the latest round of control measures aimed at depressing soaring home prices.
About 46.5 respondents said the price will surge again after a short respite, and another 45 percent say they are indifferent, because they cannot afford housing even if the price stabilizes.
But not so many can be indifferent to garlic prices.
This garlic issue can be understood in a bigger context.
Yao Jian, a spokesman for the Ministry of Commerce, said on Sunday that China's capacity to price commodities in the international market is almost non-existent.
He said while the price of steel per ton has increased from 2,000 yuan in 2002 to 4,400 yuan today, the iron ore price has soared from less than US$30 to US$150 per ton during the same period.
A Morgan Stanley researcher said the bank would always forestall by buying up whatever China intends to buy.
When another investment banker Goldman Sachs began to acquire some pig-raising farms in China December 2008, not a few people worried that so dignified a name might be tarnished by the stench of pigsty.
We know now that it is the other way around.
Unlike Foxconn, which has to apologize repeatedly for a recent spate of suicides by employees, investment bankers are still flying high, their analyses eagerly sought by policy makers, economists and naive reporters.
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