Five factors make food prices continue to rise
The macroeconomic data of January this year is about to come out, people’s highly concerned CPI may once again break through 5% or even hit a new high, and rising food prices are still the main driving force for the current increase in CPI, and price changes will largely be changed in the future. Continued to be subject to changes in food prices. So, what kind of trends in future food prices will show up? In my opinion, the rise in food prices will become a norm. The main basis for its judgment is the following five reasons.
First, the area of ​​cultivated land has gradually decreased, making it difficult to stabilize food prices. Land is the mother of grain, and the stability of grain prices is the basis for stable food prices. The per capita arable land area in China is only 1.4 mu, which is less than half of the world's per capita arable land area. Per capita arable land in some provinces and cities is even lower than the 0.8 mu warning line set by the UN Food and Agriculture Organization. With the rapid advancement of urbanization and industrialization, a large amount of arable land has been transformed into commercial housing construction land and industrial land. Since urbanization and industrialization are still in a period of rapid development in at least 10 years, the reduction in the area of ​​cultivated land will continue for quite some time. This will inevitably affect the supply of agricultural products and thus raise food prices. Since the second half of last year, the prices of vegetables in major cities such as Beijing and Shanghai have risen sharply, and the significant reduction in vegetable cultivation is an important reason. The reduction of arable land has become a major constraint to the stability and balance of food supply and demand.
Second, the rising cost of agricultural production puts food prices under constant upward pressure. This increase is reflected in two aspects: First, the rise in material costs. The price of coal, oil, natural gas and other energy resources and the increase in prices of agricultural production materials such as fertilizers, pesticides, and plastic films have pushed up the prices of agricultural inputs; the gradual increase in land transfer contracting costs has increased the cost of land. Second, the rising cost of labor. China's economy has now entered the “Lewis Turning Pointâ€, and labor supply has shifted from surplus to local and structural shortages. The imbalance in labor supply and demand has become a direct driving force for the increase in labor prices. On the other hand, China's cities must gradually establish a normal wage growth mechanism for their employees, and in rural areas they must gradually establish a stable growth mechanism for agricultural income. These two mechanisms are also an important factor in the rise in labor prices. It can be said that the increase in the cost of agricultural production is a long-term factor driving the rise in food prices.
The third is the drive of international agricultural product prices. In the context of economic globalization, the rise in the prices of international agricultural products has become an external cause of the rise in domestic food prices. In particular, it should be noted that the prices of international agricultural products not only have product attributes but also financial attributes. Nowadays, the pricing mechanism of agricultural products is more complicated. The price of agricultural products is not only closely related to the supply and demand of agricultural products, but also subject to changes in the prices of agricultural derivative trading under the influence of international speculative funds. Under the combined effects of the depreciation of the US dollar, the grave situation of global food production, and speculative capital intensification, international agricultural products are facing increasing pressure on prices. This external factor will continue to play an important role in promoting China's food prices.
Fourth, the domestic currency is oversupply, which provides suitable currency conditions for rising food prices. At the end of 2010, the country’s broad money balance reached 72.6 trillion yuan, an increase of 437% from 2000. The surge in money supply not only distorts the relationship between supply and demand for agricultural products, but also provides a funding basis for the speculation of agricultural products. Last year, the prices of small varieties of agricultural products such as "garlic oysters" and "beans you play" soared, and are directly related to speculation. The negative impact of ultra money on food prices will be difficult to eliminate in the short term.
Fifth, the impact of natural disasters. Although natural disasters are a random disturbance that affects food prices, China has a vast territory and there are always natural disasters occurring in some areas each year, which will also affect the prices of related grain varieties. For example, the “Southern Drought and North Drought†that may occur this year may increase. Wheat price. Under the circumstances of abnormal global climate change, natural disasters have become a factor that cannot be ignored in the promotion of rising food prices.
Some people think that China’s grain has been harvested for seven consecutive years. The supply and demand of agricultural products are basically balanced, and food prices cannot continue to rise. This understanding is biased. China's total grain output has been slugging around 1 trillion jin for more than ten consecutive years. The so-called "supply and demand balance" is just a kind of "tight balance." Its long-term and sustained balance is not solid. Even if the supply and demand of domestic food is relatively stable, the increase in the prices of international agricultural products will also drive domestic food prices to rise. The harvest of grain does not necessarily guarantee the stability of domestic food prices. Therefore, we cannot underestimate the pressure of rising food prices in the future, and we must fully understand and be vigilant in responding to the rising trend of food prices.
Among the above factors, the government's policy measures may not be able to “incompetent†the imported inflationary pressures brought about by changes in labor costs and rising international agricultural prices. However, what the government needs to do is to increase supply and curb demand, effectively guarantee the area of ​​arable land, increase agricultural income in real terms, strive to improve the ability to fight disasters and reduce disasters, maximize the supply of agricultural products, and strengthen monetary policy control to maintain reasonable The growth rate of money supply has severely cracked down speculation on agricultural products.
First, the area of ​​cultivated land has gradually decreased, making it difficult to stabilize food prices. Land is the mother of grain, and the stability of grain prices is the basis for stable food prices. The per capita arable land area in China is only 1.4 mu, which is less than half of the world's per capita arable land area. Per capita arable land in some provinces and cities is even lower than the 0.8 mu warning line set by the UN Food and Agriculture Organization. With the rapid advancement of urbanization and industrialization, a large amount of arable land has been transformed into commercial housing construction land and industrial land. Since urbanization and industrialization are still in a period of rapid development in at least 10 years, the reduction in the area of ​​cultivated land will continue for quite some time. This will inevitably affect the supply of agricultural products and thus raise food prices. Since the second half of last year, the prices of vegetables in major cities such as Beijing and Shanghai have risen sharply, and the significant reduction in vegetable cultivation is an important reason. The reduction of arable land has become a major constraint to the stability and balance of food supply and demand.
Second, the rising cost of agricultural production puts food prices under constant upward pressure. This increase is reflected in two aspects: First, the rise in material costs. The price of coal, oil, natural gas and other energy resources and the increase in prices of agricultural production materials such as fertilizers, pesticides, and plastic films have pushed up the prices of agricultural inputs; the gradual increase in land transfer contracting costs has increased the cost of land. Second, the rising cost of labor. China's economy has now entered the “Lewis Turning Pointâ€, and labor supply has shifted from surplus to local and structural shortages. The imbalance in labor supply and demand has become a direct driving force for the increase in labor prices. On the other hand, China's cities must gradually establish a normal wage growth mechanism for their employees, and in rural areas they must gradually establish a stable growth mechanism for agricultural income. These two mechanisms are also an important factor in the rise in labor prices. It can be said that the increase in the cost of agricultural production is a long-term factor driving the rise in food prices.
The third is the drive of international agricultural product prices. In the context of economic globalization, the rise in the prices of international agricultural products has become an external cause of the rise in domestic food prices. In particular, it should be noted that the prices of international agricultural products not only have product attributes but also financial attributes. Nowadays, the pricing mechanism of agricultural products is more complicated. The price of agricultural products is not only closely related to the supply and demand of agricultural products, but also subject to changes in the prices of agricultural derivative trading under the influence of international speculative funds. Under the combined effects of the depreciation of the US dollar, the grave situation of global food production, and speculative capital intensification, international agricultural products are facing increasing pressure on prices. This external factor will continue to play an important role in promoting China's food prices.
Fourth, the domestic currency is oversupply, which provides suitable currency conditions for rising food prices. At the end of 2010, the country’s broad money balance reached 72.6 trillion yuan, an increase of 437% from 2000. The surge in money supply not only distorts the relationship between supply and demand for agricultural products, but also provides a funding basis for the speculation of agricultural products. Last year, the prices of small varieties of agricultural products such as "garlic oysters" and "beans you play" soared, and are directly related to speculation. The negative impact of ultra money on food prices will be difficult to eliminate in the short term.
Fifth, the impact of natural disasters. Although natural disasters are a random disturbance that affects food prices, China has a vast territory and there are always natural disasters occurring in some areas each year, which will also affect the prices of related grain varieties. For example, the “Southern Drought and North Drought†that may occur this year may increase. Wheat price. Under the circumstances of abnormal global climate change, natural disasters have become a factor that cannot be ignored in the promotion of rising food prices.
Some people think that China’s grain has been harvested for seven consecutive years. The supply and demand of agricultural products are basically balanced, and food prices cannot continue to rise. This understanding is biased. China's total grain output has been slugging around 1 trillion jin for more than ten consecutive years. The so-called "supply and demand balance" is just a kind of "tight balance." Its long-term and sustained balance is not solid. Even if the supply and demand of domestic food is relatively stable, the increase in the prices of international agricultural products will also drive domestic food prices to rise. The harvest of grain does not necessarily guarantee the stability of domestic food prices. Therefore, we cannot underestimate the pressure of rising food prices in the future, and we must fully understand and be vigilant in responding to the rising trend of food prices.
Among the above factors, the government's policy measures may not be able to “incompetent†the imported inflationary pressures brought about by changes in labor costs and rising international agricultural prices. However, what the government needs to do is to increase supply and curb demand, effectively guarantee the area of ​​arable land, increase agricultural income in real terms, strive to improve the ability to fight disasters and reduce disasters, maximize the supply of agricultural products, and strengthen monetary policy control to maintain reasonable The growth rate of money supply has severely cracked down speculation on agricultural products.
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