CHINA: 36 MAJOR CITIES TOLD TO KEEP FOOD, OIL RESERVES
December 13th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
PowerShares DB Agriculture Fund (DBA) NOTE: I am slightly overweight this one. If you look at the ongoing crises involved with food production, you see not just a perfect storm, but multiple perfect storms.
China is implementing emergency measures as food supplies dwindle and prices skyrocket.
* sigh *
This is not a good way to be making money. I don’t like having to do this, just like I wouldn’t want to find myself in a gun battle. Sometimes, though, it’s kill or be killed. Take your pick.
Via: China Daily:
The central government Tuesday instructed 36 major cities to each maintain 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.
A notice jointly issued by five ministries led by the country’s top economic planning agency, the National Development and Reform Commission, said the move was necessary to ensure a “ready” emergency production and distribution system.
The cities include Beijing, Shanghai and Guangzhou.
Local governments were also asked to designate companies to ensure the sound production and distribution of food and cooking oil.
“Local governments should also inspect those companies regularly to ensure the quantity and quality of their reserves,” the notice said.
Warning of major increases in the prices of corn, wheat and cooking oil, yesterday’s notice came with an announcement from the National Bureau of Statistics that the country’s key inflation indicator, the consumer price index (CPI), surged to an 11-year high of 6.9 percent last month, of which 5.4 percentage points were a result of food price hikes.
Grain prices last month rose 6.6 percent over the same period last year, while cooking oil prices increased 35 percent.
Pork prices, which have been blamed for the recent increase in the CPI, soared by 56 percent.
Nine straight months of consumer price hikes, fueled by the rising cost of food, have taken their toll on the public.
