February 8, 2008
Last year the price for a bushel of wheat, corn, soybeans and other grains skyrocketed. And the price we pay at the store for a variety of perishable items has gone up in tandem. Now comes the news of what the severe weather in China has done to their own harvests. Do you want to place any bets that the prices we pay for our food is going to go down? Maybe time to load up at Costco???
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Will Beijing finally soften its longstanding resistance to grain imports?
That is the question that many analysts are asking as China begins to thaw from its worst winter weather in a century.
Some say yes, that the world's fastest-growing major economy will be forced to tap global markets for corn and wheat, driving already record prices higher and spurring further food inflation.
"In the near term, unless you can drastically increase agricultural yields, I think China will probably have to import more grain, especially feed grain," said Jing Ulrich, chairman of China equities at JPMorgan.
China is the world's biggest importer of soybeans, which it uses mainly for animal feed, and Ulrich said it could become a net importer of corn as early as 2008 as demand for meat grows. |
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– Reuters |
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