In China, a notable increase in vegetable prices is impacting households, diverging from the broader deflationary pressures across Asia's largest economy. This surge, affecting staples from cabbages to cucumbers, is attributed to a mix of disruptive weather events and logistical challenges, notably Typhoon Bebinca's impact, the strongest to hit Shanghai and the Yangtze River Delta in over seventy years.
The rise in vegetable prices, while potentially supporting the consumer price index, poses a risk to household spending on other goods and may hinder China's economic recovery efforts. Despite wide-ranging stimulus measures announced by Beijing, vegetable prices have significantly exceeded seasonal norms. Commerce ministry data indicates a jump in wholesale vegetable prices to more than 6 yuan per kilo as of Sept. 20, a peak since at least 2018.
Agriculture ministry figures echo this trend, with a more than one-third increase in the average wholesale price of 19 vegetables compared to last year. Notably, green peppers have doubled in price, and spinach now rivals the cost of eggs per kilogram.
Extreme weather conditions, including excessive heat and rainfall, have disrupted vegetable production, particularly in Shandong province, a key agricultural region. The "Chinese Vegetables" magazine reports delays in market arrivals due to these conditions, with additional damage in Jiangsu, Zhejiang, and around Shanghai from heavy winds and rain. Flooding in northern vegetable-producing areas has also been reported.
Further weather challenges are anticipated, with up to 250 millimeters of rainfall expected in southern China, posing additional hurdles for vegetable producers. Amid these developments, China's central bank has adjusted its monetary policy, and international efforts are underway to counter China's dominance in metal supply chains. The yuan's recent performance against the dollar also reflects ongoing economic strategies and external influences.
Source: BNN Bloomberg