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Curb Inflation Now! [Copy link] 中文

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Post time 2007-7-26 10:20:41 |Display all floors
Food prices are rising, houses are getting unbearably expensive, and stocks are trading at record highs. Many at home and abroad are seriously worried about China growing out of control. Yet, the government's monetary policy commission and the central bank until today have resisted calling the economy "overheated".

Although Premier Wen Jiabao of the State Council suggested "moderation" of the proactive monetary policy, which the People's Bank of China has pursued for the past five years, the commission and the central bank only made a small move on July 20 to raise the one-year rate on borrowing and depositing by 27 percentage points. At the same time, the Ministry of Finance reduced the taxation rate on interest income to 5 percent from 20 percent, while not discarding it completely as widely expected.

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Post time 2007-7-26 11:04:32 |Display all floors

worry abt that

inflation horrible!!!
always be OK
always be Great

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Post time 2007-7-26 12:05:39 |Display all floors
Hang on! The food prices were to some extent pushed up by the floods. According to the Chinese official statistics, however, the non-food prices rose up by only 0.7%.  The same things happened in the United Kingdom:

Food prices on the rise and rise
By Nick Higham
BBC News correspondent

As more doomsday predictions emerge about the price of staple foods, the BBC has taken an in-depth look at what is pushing up the costs.

Loaf of bread
Wheat prices across Europe hit their highest levels in more than a decade last month

They've been baking bread at Bonnett's in Somersham, on the edge of the Cambridgeshire Fens, since 1803 at least.

The shop, with its venerable green and gold Hovis sign above the entrance, is packed with a mouth-watering selection of bread and buns, cakes and cold meats.

The bakehouse at the back supplies a small chain of seven other Bonnett's shops in the towns and villages round about.

But life for independent bakers has been getting tougher.

There's the competition from the supermarkets. And then there's the rising cost of raw materials.

In the past year the price of a loaf of bread in UK shops has risen 15 per cent. Soon it'll go up again.


In common with the rest of Britain's flour millers, David Bonnett's suppliers have told him to expect increases of around £40 a tonne or more in the price they charge.

That in turn will mean another four or five pence on the price he charges his customers for a large loaf. He calls the rises "frightening".

Bread isn't the only staple food whose price has been rising rapidly.

According to the research company TNS Worldpanel, in the 12 months to June, the supermarket price of milk has gone up 11 per cent, eggs have gone up almost 18 per cent, butter has gone up five per cent and meat six per cent, all well above the rate of inflation.

Some foods haven't risen in price: cheese, according to TNS Worldpanel, has actually fallen slightly.

But that's about to change: the wholesale price of cheesemakers' principal ingredient, milk, has been rising rapidly.

The cost of powdered milk has more than doubled. It won't be long before that feeds through to the consumer in higher prices not only for cheese - around 45 pence more per kilo by Christmas - but for other foods, like pizza, with high cheese content.

Differing fortunes

So what's going on? The answer seems to be a combination of three things.

The price of eggs has also increased

One is the rising cost of oil, which affects everyone, including farmers and food companies, shops and supermarkets.

A second is increasing demand for western foodstuffs from developing countries like China.

A few miles away from David Bonnett's shop, George Munns farms 200 hectares on the outskirts of Chatteris.

What's bad news for the baker is good news for him.

In two weeks time he'll start harvesting his winter wheat, destined to be made into animal feed. He's already sold it for £112 a tonne, a huge increase on the £70 a tonne he got last year.

For the first time in several years he'll be making a profit on the crop, because it costs him around £72 a tonne to produce.

His good fortune is partly a consequence of others' misfortune: drought in Australia has resulted in several years of poor harvests there.

Booming biofuels

But that increase in demand in China has a lot to do with it as well: more affluent Chinese consumers eat more meat; China needs to import more cereals to feed its mushrooming population of pigs and poultry.

The third reason is biofuels.

Forty minutes' drive north from Chatteris, across the county border at Wissington in Norfolk, is one of Britain's biggest sugar beet factories.

The owners, British Sugar, are currently building an extension to turn surplus sugar beet into 70 million litres a year of ethanol; it'll be blended with conventional petrol to run cars.

Tractor on sugar beet field
Ethanol is made from crops such as sugar beet

Several other biofuel plants are planned in the UK but biofuels are already big business in the United States, where bioethanol is seen as a greener and more sustainable alternative to traditional petrol.

The downside is that land which until recently was growing crops for food is now growing crops for fuel.

The United Nations says a third of the total US maize crop went for ethanol last year.

The International Monetary Fund say there's no question that demand for biofuels is driving up food prices - and that it will go on doing so - though in the UK the National Farmers Union disputes that.

But the NFU has said the era of cheap food was over - something it welcomes, because it says farm-gate prices have lagged behind rising production costs and the cost of living for far too long.

As for the rest of us, it's clear we're just going to have to get used to paying more for our food.

Data Source: news dot bbc dot co dot uk/2/hi/uk_news/6909469.stm

[ Last edited by wavelets at 2007-7-26 12:36 PM ]

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Post time 2007-7-26 12:19:09 |Display all floors

Analysis: Food prices

Analysis: Food prices

By Harry Wallop, Consumer Affairs Correspondent
Last Updated: 2:26am BST 26/07/2007

It is hard to tell sometimes whether it is feast or famine when it comes to food prices.

Reports have abounded in recent months that we better get used to sky-high prices on supermarket shelves as droughts in Australia and floods in Tewkesbury conspire to wipe out crops.

And then earlier this week we learned that the humble tea bag was four times cheaper than a generation ago.

Can both be right? Yes, is the simple answer.

We are a blessed generation, the majority of whom have never known food rationing.

Technology has allowed farmers and food companies to supply supermarkets with an unprecedented array of plentiful and mostly cheap food.

We now spend just 7.8 per cent income on food, compared with 21 per cent in 1967 – and are we any thinner?

However, after getting used to these incredibly cheap prices, the last year has been a rude awakening.

The price of a loaf of bread, which cost a scandalously low 7 pence in the 1990s, is very close to touching £1.

In the short-term food prices are shooting up – but from a very low base.

The reasons are a catastrophic wheat harvest in Australia, causing a shortage not just of flour but also animal feed.

This has come at the same time as Chinese consumers switching to a westernised diet, driving up demand for wheat and milk.

The mix of higher demand and lower supply leads inevitably to higher prices, any economist will tell you.

This summer’s floods are adding to this short-term food price shock, with farmers facing higher costs and half their crops wiped out.

Data Source: www dot telegraph dot co dot uk/news/main.jhtml?xml=/news/2007/07/25/nflood525.xml
But should we complain? Not if you lived through food rationing.

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Post time 2007-7-26 12:33:33 |Display all floors

Economic Costs of Floods ... ?mod=googlenews_wsj

Economic Costs of Floods
In U.K. Could Be Limited
July 25, 2007

LONDON -- Flooding due to weeks of heavy rain has caused billions of pounds of damage in the U.K., but analysts say new demand could eventually offset short-term costs to the economy.

Large areas have been under water since Friday, with power and drinking water badly affected and thousands of homes evacuated.

With more heavy rainfall expected this week, the cost to insurers is already estimated at more than £3 billion ($6.17 billion), Fitch Ratings agency said. The U.K. says it is the worst flooding in 60 years. Heavy rains throughout the early part of the summer have already hurt some of the U.K.'s biggest retailers.

Last week, William Morrison Supermarkets PLC Chief Executive Marc Bolland said recent flooding in northern England affected eight of its stores and is expected to cost the group about £1 million. A representative for retailer Asda Group Ltd., the country's second-biggest supermarket chain by sales, said it was "inevitable that we will experience disruption when major roads are closed." Tesco PLC, the country's biggest supermarket chain, said it had been forced to close a store.

Some economists see the chance of a revival as residents rebuild their homes and replace possessions once the waters recede.

"The flooding will reduce savings and increase expenditures, especially for durable goods, over late summer and the early autumn period, suggesting the economy will receive an unforeseen boost," said Hans Redeker, chief currency strategist at BNP Paribas in London.

But the upturn won't come this month. July's economic data are also likely to be gloomy, with retail sales and factory output set for a dent, Mr. Redeker said. Howard Archer, chief U.K. economist at Global Insight, agreed that "disasters tend to have a near-term dampening impact on growth, but often lead to a pickup in activity further out" because of new consumer spending.

But Mr. Archer warned that the bounce back may be limited in the context of the overall size of the economy. Considering higher interest rates, moderate real income growth and increased debt levels, Mr. Archer appears skeptical about the chance for a consumer spending surge.

In fact, some companies are reaping benefits from the wet weather. Blacks Leisure Group PLC reported a 5% rise in underlying sales for the first 19 weeks of the current financial year, driven by strong demand for camping and waterproof clothing and products. Burberry Group PLC Chief Financial Officer Stacey Cartwright said her company was selling more lightweight trench coats and other outerwear items. And Domino's Pizza UK & Ireland PLC said wet weather had helped its first-half profit, as people stayed home, choosing not to venture out for food.

Other factors such as damage to crops and future planting schedules, could also boost food prices in the longer term. The National Farmers' Union said that while it is difficult to generalize on how the floods might affect prices, the heavy rain might pinch supply.

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Post time 2007-7-26 13:28:50 |Display all floors

my hometown is being flooded,my wage is being relatively depreciated.

what should i do?
All i can is to be a better man.

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Post time 2007-7-26 13:45:26 |Display all floors

Reply #1 voice_cd's post

We need to slowly appreciate the RMB against the US$ and import some deflation (when valued in Rmb) into our country!

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