04/26/2011

China’s Cheap Vegetables Problem

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A Chinese vegetable vendor waits for customers at a market in Hefei, east China’s Anhui province on April 14, 2011.

David Gray/Reuters

When China suffers inflation, food prices are always a significant part of the problem. But the conundrum China’s leaders face with this latest round of inflation is somewhat bizarre: While the country’s consumer price index is running at a near three-year high, vegetables are so cheap that tons and tons of them are being left to rot away in the fields.

Of course, vegetables are still expensive in the cities, and only in the cities, and that’s exactly where the problem is. According to the official Xinhua News Agency (in Chinese), fat, juicy Chinese cabbages are selling at one yuan per 500 grams in city markets — ten times the price the cabbage growers can fetch in the countryside.

Why, with urbanites paying such princely sums, are farmers leaving their cabbages on the ground? Because middlemen, transportation companies and the government itself are pocketing the bulk of the price differential.

Logistics-induced costs accounts for two thirds of the total cost for vegetables nationwide, Zhou Wangjun, vice director of the National Development and Reform Commission’s price section, is quoted by Xinhua saying.

Read more at ChinaRealTimeReport

 

Apr 26, 2011 1:38:46 PM | Current Affairs, Food and Drink

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