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After torrential rains flooded crops this month, vegetable prices in China are surging, fueling consumer concern about food prices at a time when consumers must brace themselves for an increase in energy expenses in the run-up to winter.
In September and early this month, unusually severe rains soaked large swaths of northern China, drowning the top vegetable-growing state of Shandong.
“All the vegetables are dead in the ground,” said Zhou Rui, a farmer who cultivates about 7 hectares (17 acres) in the Juancheng county of the province.
She noted that there was little left to pick after fields of spinach, cabbage, and coriander were inundated, and that some farmers had not replanted because the weather had already turned cold.
The price of spinach increased last week to 16.67 yuan ($2.61) per kg, up from 6.67 yuan in late September, according to a price index issued in the province vegetable market hub of Shouguang.Broccoli, cucumbers, and cabbage prices have all more than doubled in recent weeks.
The skyrocketing prices are a major issue on China’s Twitter-like Weibo (NASDAQ: WB), with many users claiming that veggies are now more expensive than pig, the country’s main meat.
“Coriander is now 17.8 yuan per half kilo, it really is more expensive than pork!” wrote one user in the eastern province of Anhui. The spike, which comes at a time when inflation is under investigation, is concerning government officials in Beijing, who want to secure adequate food supply ahead of winter.
According to the municipal authorities, the average wholesale price of vegetables in the capital has increased by 39.8 percent since last month, with some leafy vegetables increasing by more than 50 percent.
Beijing officials have warned that prices may rise higher in the coming weeks as the city looks south for veggies when temperatures drop and high energy prices increase transportation costs.
High vegetable prices are unlikely to increase total consumer price inflation, but they come at a time when high fuel costs are set to be progressively reduced.
“It’s a very sharp increase, so it’s very noticeable,” said Darin Friedrichs, senior Asia commodity analyst at StoneX. “We may see consumers budgeting purchasing of other things in response.” Higher energy prices are also pushing up operating costs for greenhouses, in addition to record prices this year for fertilizer.
“Our natural gas prices are up at least 100% and we think they could triple during Chinese New Year,” said Xu Dan, manager of the HortiPolaris greenhouse in Beijing, referring to China’s most important holiday, due next February.
“I have to find a way to increase our energy efficiency. You can’t ask consumers to pay three times the price.” Chinese coal prices have risen over 190 percent this year due to constrained supply as a result of strict safety checks and graft investigations in major mining regions, while torrential rains have flooded hundreds of northern coal mines.
Story by : Norvisi Mawunyegah