atans1

Heard this excuse from yr egg seller?

In China, Commodities on 06/05/2016 at 11:40 am

On why the price of eggs are up?

From NYT Dealbook

CHINA LENDING SENDS EGG FUTURES SOARING China has poured hundreds of billions of dollars into its economy in a bid to support growth and a lending deluge has sent money into some unexpected places,Neil Gough reports in DealBook.

At a financial market in Dalian, where investors can place bets on the future productivity of the country’s hens, egg futures have surged by as much as one-third since March. This might be justified if investors were expecting an end to China’s chicken flocks, but the market’s usual participants say the chickens are fine. Indeed, the actual price of eggs in the country’s markets has fallen from a year ago, according to government statistics.

China is the world’s biggest producer of eggs, but it is not clear whether the investment surge in eggs will have an impact on real-world prices, as futures prices can take months to trickle down to the real world. If it subsides, the price of eggs in local markets may not move.

Eggs are not the only commodity out of kilter – domestic prices and trading volumes for steel, garlic, cotton, iron ore and other items have soared despite demand being dampened by China’s economic slowdown.

Economists blame Beijing’s efforts to shore up the economy. China has a tendency to experience investment bubbles when the government steps up spending and lending – previous efforts to bolster growth have created unexplained rises and striking drops in the real estate and stock market.

Government officials increased lending by state-controlled banks and offered other support measures in the first few months of the year as economic growth slowed and longtime drivers like manufacturing and exports showed continued weakness.

In the short term, the lending may be good for global growth, but China risks adding to its already fast-growing pile of debt, which is nearly 300 percent of gross domestic product by some estimates.

It seems that policy makers have set aside their concerns about the debt burden for now, but by delaying a move to wean itself off cheap credit, China may be setting itself up for even more problems.

Advertisements
  1. No worries man. Just keep a few hens in your spare room or living room. Fresh eggs every day. I used to keep 3/4 chickens in my empty maid’s room. But got tired of cleaning up weekly. Those in landed pty should be easy.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: