Monday, February 25, 2008

China’s role in stable global grain prices

Recently there has been a global upsurge of inflation in food prices, especially for grains. Grains are so important, that increases in their cost ultimately affect other food prices, especially meat products. Globalization has become such a strong force that the effects of ones segment of the globe could affect the world.


Concerns have been expressed about the roles of countries such as China and India whose burgeoning economies, from their globalization roles, in pushing up the prices of foods, petroleum and other commodities. If China does not address these concerns, it will be subjected to continuing criticism from the global community.


In Peoples Daily Online, according to its Ministry of Agriculture, China is a net exporter of grains. It has increased production from its arable lands and has even built up a stored surplus. By it reckoning, it is therefore not contributing to the increase of cereal prices.


If the above is correct, China should be commended for their having achieved self-sufficiency in grains. However, before giving them credit for having done so, other aspects of globalization has to be looked at before the book is closed on the subject and China is let off the hook. How much meat products are being imported, that is dependent upon grains and cereals? What are the effects of rising energy costs, especially from petroleum, that China is contributing to? The answer is not simple!

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