Thursday, June 19, 2008
Cocoa Surges While Mexico Controls Food Prices
Get ready for your chocolate fix to be a little more dear. Cocoa prices have hit a 28-year high. According to a story in the Financial Times, the reason is concern "over the size and quality of this year’s crop from Ivory Coast, the world’s largest producer." This basic component of chocolate has climbed 52.3 percent this year alone:
In the meantime, in another Financial Times story, food prices are hitting hard enough in Mexico that the "center-right goverment" - which I take to mean on the conservative side - has put price controls into place on 150 basic items, including beans, cooking oil, canned tuna, and fruit juice. Prices will remain frozen from now until the end of the year. But given the hefty jumps we've been seeing in the underlying goods, what happens to the merchants and wholesellers? I understand that people with no money are hurting, but this seems to be a short-sighted approach of addressing a problem. The government shifts the burden onto businesses, which might end up losing money in the long run and possible start cutting jobs, because it wants to appear as though it's active toward the problem. But the dynamics don't change, and the effect is to sweep the pain under a carpet and out of site. The eventual price for this approach may be higher and longer-lasting, but, hey, maybe that will be for someone else to deal with.
The International Cocoa Organisation is forecasting a small supply surplus of 71,000 tonnes in 2008/09, but a poor crop in Ivory Coast could push the market into a supply deficit for a third year in a row.Similarly, Brazil has reported that its sugal crop will be delayed and smaller because of rain, so sugar prices rose by 3.2 percent. Now here's the real interesting part, I think: prices for October sugar are 12.83 cents a pound. How much do you pay for a pound of sugar? Who gets the rest of that money, and what value do they add to justify their cuts?
In the meantime, in another Financial Times story, food prices are hitting hard enough in Mexico that the "center-right goverment" - which I take to mean on the conservative side - has put price controls into place on 150 basic items, including beans, cooking oil, canned tuna, and fruit juice. Prices will remain frozen from now until the end of the year. But given the hefty jumps we've been seeing in the underlying goods, what happens to the merchants and wholesellers? I understand that people with no money are hurting, but this seems to be a short-sighted approach of addressing a problem. The government shifts the burden onto businesses, which might end up losing money in the long run and possible start cutting jobs, because it wants to appear as though it's active toward the problem. But the dynamics don't change, and the effect is to sweep the pain under a carpet and out of site. The eventual price for this approach may be higher and longer-lasting, but, hey, maybe that will be for someone else to deal with.
Labels: chocolate, government, news, prices, sugar
Wednesday, May 30, 2007
China's Former Food, Drug Head Sentenced to Death
Zheng Xiaoyu, former head of China's food and drug administration from 1998 to mid-2005, was removed from the position. The reason? Bribery and corruption. And on Tuesday, after pleading guilty to the charges, he was given a death sentence.
Before writing this off as Chinese indifference to the individual and having an unbalanced view of justice, realize that this situation with bad products hitting the market has been serious. For all the problems the U.S. has seen with Chinese food imports and deadly pet food, it's nothing compared with the deaths that China has experienced as the result of bad antibiotics and drugs. Then a key ingredient in antifreeze appeared in cough syrup and tooth paste shipped to Central and South America, with 100 dying last year in Panama alone, according to the New York Times account. (However, USA Today puts the number at 51, once again showing the collective objective accuracy that is the United States press.)
Zheng got richer to the tune of $832,000 ($850,000, according to the Times), not that it will do him any good now. China is under huge pressure to reform its safety record. According to USA Today, "Zheng's sentence requires review by a higher court and approval by China's highest judicial panel before he can be executed."
It could be that this is window dressing, as USA Today reports:
Before writing this off as Chinese indifference to the individual and having an unbalanced view of justice, realize that this situation with bad products hitting the market has been serious. For all the problems the U.S. has seen with Chinese food imports and deadly pet food, it's nothing compared with the deaths that China has experienced as the result of bad antibiotics and drugs. Then a key ingredient in antifreeze appeared in cough syrup and tooth paste shipped to Central and South America, with 100 dying last year in Panama alone, according to the New York Times account. (However, USA Today puts the number at 51, once again showing the collective objective accuracy that is the United States press.)
Zheng got richer to the tune of $832,000 ($850,000, according to the Times), not that it will do him any good now. China is under huge pressure to reform its safety record. According to USA Today, "Zheng's sentence requires review by a higher court and approval by China's highest judicial panel before he can be executed."
It could be that this is window dressing, as USA Today reports:
Qiu Feng, an independent scholar and columnist for China Newsweek magazine, wrote on the website Southcn.com that Zheng's sentence would do little to end deeply entrenched graft.There's also a problem of counterfeit food that the papers and some other accounts mention in passing. Counterfeiting of products is an enormous problem, and one of the big categories is in food, particularly packaged Asian foods. Those simply won't be touched by improved official inspections because, by definition, counterfeit products are outside the official manufacturing and inspection systems. The deaths and injuries we've seen will likely to continue until counterfeiting itself is reduced, separately from increasing regulation.
Labels: Asian, China, Chinese, counterfeit, food safety, government
