Posted on 01/17/2008 11:35:09 PM PST by TigerLikesRooster
Soaring soyabean price stirs anger among poor
By Raphael Minder in Hong Kong, John Aglionby in Jakarta and Jung-a Song in Seoul
Published: January 18 2008 02:29 | Last updated: January 18 2008 02:29
During the ancient Zhou dynasty, soyabeans were among China’s five sacred grains.
Thousands of years later soyabeans maintain their importance to the Chinese and most other Asians, but they have recently triggered much more down-to-earth preoccupations.
On Monday, 10,000 Indonesians demonstrated outside the presidential palace in Jakarta after soyabean prices soared more than 50 per cent in the past month and 125 per cent over the past year, leaving huge shortages in markets. And while the social unrest has not yet spread to other Asian nations, consumer frustrations are mounting.
From tofu in China to miso, or soyabean paste, in Japan, soya products are an essential ingredient in Asian cuisine as well as staple food for the region’s poor.
For many Indonesians, a piece of tempeh, or fermented soyabean cake, is often their only source of protein, and last year soya products accounted for 22 per cent of Indonesians’ protein intake, excluding rice, according to government data.
“It’s probably double that for poor people, who make up almost half the population, because it’s the cheapest protein source,” says Harbrinderjit Dillon, an agriculture analyst.
“The crisis shows how low the government has sunk. The public’s attitude is that if it can’t even take care of [soyabean products] then what can it do?”
World soyabean prices climbed to a record this week, partly because farmers in the US and Asia have instead been growing corn, palm oil and other crops to supply the biofuel industry. Bad harvests in Latin America and rising Chinese demand have added to the price pressure.
“It’s finally a trade-off between filling stomachs and filling diesel tanks in cars and trucks,” says Ashok Gulati, director at the International Food Policy Research Institute.
The Indonesian government is now taking tentative steps to address the price surge, but their impact could prove limited. Mustafa Abubakar, the head of Indonesia’s government logistics agency, said on Thursday that Jakarta would import lower-quality soyabeans than previously from the US to help contain the price surge.
Authorities in other countries are also starting to act. In South Korea, the national agency handling imports, Korea Agro-Fisheries Trade Corporation, is poised to increase soyabean imports to contain prices, while the Korean agricultural ministry has formed a taskforce to deal with the worries over price.
Meanwhile, food producers have been quick to pass on higher costs to consumers. In Japan, miso companies recently announced rises of 10 to 15 per cent.
In South Korea, soyabean prices increased by 10.7 per cent in December alone, translating this month into retail price rises of up to 30 per cent for soya milk, snacks and some other soya goods.
In Hong Kong, tofu sellers at the city’s Graham Street market have raised prices for the first time in at least 10 years.
“Our costs have gone up because the tofu factories have increased their prices twice since last October,” says Ng Chou, 73, whose family’s To Kei tofu store has been in existence since 1949.
A slab of tofu from Mr Ng that cost HK$4 (50 US cents) last October now costs HK$5.
An essential problem for Asia is its dependency on imports.
Japan imports 95 per cent of the roughly 4m tonnes of soyabeans consumed there each year, with three-quarters of the total coming from the US. Casting its ever larger shadow over world prices is China, already the world’s largest importer.
Chinese demand has been surging, particularly for soyabeans used as feedstock as a more affluent society raises its meat consumption. Chinese pork prices have climbed about 80 per cent over the past year – a much bigger source of popular frustration.
In the coming decade Chinese import demand is set to “dwarf all other countries” and account for more than three-quarters of the projected gain in world soyabean trade by fiscal 2017, according to the US Department of Agriculture.
“China is the biggest swing factor for the soyabean market. Period.’’ says Dong Tao, a regional economist at Credit Suisse in Hong Kong.
“Chinese soyabean imports are very volatile, as imports supplement domestic production, and the swings can be hard to explain.”
Maybe...no, not really. Since when do Socialists (including the enviros) behave logically?
There was some sort of statement this week about it taking over 200 acres to grow enough fuel for the average driver per year. Pretty much shows the folly there. I’m probably good for a couple of thousand acres worth cause I drive in Texas.
That’s not environmentalists but people wantig to get rid of oil dependency and longing for more efficiency. Nothing bad with that.
What makes Soy expensive is a thing called derivatives. There’s those who trade soy and those who need soy. They both could get along quite well.
Then there’s those trading the options to buy on a certain date on a cerain price. These guys make the most of the money nowadays - it’s not soy that is to rare or biofuel that uses to much soy - it’s the high price for derivative contracts - and that’s an indirect result of the cheap dollar.
It’s inflation in just another dress.
With all the taxpayer money given to corn growers for ethanol,a farmer would be a fool to grow anything else.
Thank you Iowa.
Meanwhile,our energy salvation AND the return of cheap food lies under caribou and fish poop...waiting...waiting...waiting for the permission of extremist environmental misanthropes to let us go get it.
This news really curdles the TOFU of the Left.
not to mention the little U238 atom. Safest means thus far with the least environmental impact other than solar, hydro and wind.
We might import cars, machines and computers, but we export tons and tons of southern soybeans.
The growers don’t get the subsidies, the blender does. There is a small producer’s ethanol credit, that’s it.
As far as subsidies in general, there isn’t any this year because corn is too high.
Not true. There are those that speculate with futures contracts, but every buyer has a seller, and every seller a buyer. Unless you can actually make delivery or take delivery of soy beans, you must clear your speculative position before the contract date. It is a zero sum game for speculators. They keep the market price fluid, but cannot really change the overall price--that is all supply and demand driven. Cheap dollar also has no impact. Where in the world did you get such strange ideas about the commodity markets?
When I read the headline I thought they finally figured out a way to make tofu taste good. I guess it’s still going to have to be t-bones, porkchops and venison for me.
The smart farmer will sow wheat, barley and oats while the majority flood the market with corn & beans.
That would actually be the U235 atom (U-238 isn't fissionable). You CAN get fissile fuel from U-238 by "breeding" Pu-239, which IS fissionable. Hence the long-term need for breeder reactor technology.
Yeah, I'm being picky.
This is one point the enviro's will not discuss. Just don't locate any new plants in 50 year flood zones, close to active or dormant faults, known dormant volcanoes, hurricane prone areas basically, and provide tight security. In my book, not a problem at all. Just build the new ones with US made / quality controlled materials and skilled legal US labor forces.
I wonder what the reaction really is from committed vegans/vegetarians in the West?
If soy products are becoming expensive/scarce, if they are really eating local in the Northern winter, just what are they eating? I also wonder just how they are keeping warm, keeping their plumbing from freezing and getting from one place to another.
Does anyone know the answers?
Electricity from abundant sources like wind and solar are not being used wisely at this point in time. Fuel cells will be the norm in about 25 yrs. We can make ethanol from a combination of sources like sugar cane, sugar beets, and algae, but, we do not have enough land for one of those to be a single source.
Ya gotta remember, OPEC, Big Oil, automakers, banking, defense industry, and Chicom money, etc., in election war chests of DC and state leaders have made the politicoho's obliged to vote in the contributors' best ineterests. Because we have no laws in place that will not allow elected Congressmen, Senators, Presidents and Vice-Presidents to not keep the monies in their re-election coffers, we have the best government money can buy.
It would make sense to allow elected officials to only remove that money they personally have put in those funds after they leave office. All other monies would go their respected party's general fund or charity(s) of choice.
IMHO, that is government sponsored bribery and corruption, PERIOD!!
Agree on all points. The "nuclear issue" is as good a litmus test to differentiate between "real environmentalists" and "eco-freaks" as the "Second Amendment Issue" is at deterimining which politicians actually believe in the Constitution and personal liberty, and which are just giving them "lip service" (and not the kind Monica did for Billy-Jeff).
Future trades are certainly not zero sum. There’s always a spread.
There is more volume in calls then in put option - these are really executed and create a lot of demand at a certain time. As you say you have to clear it - buy actually buying.
What was ment as a price ensurance drives demand. Not the real demand.
How does that work?
Then there’s those trading the options to buy on a certain date on a cerain price. These guys make the most of the money nowadays
How does an option buyer make money? Who does he buy the option from?
200 acres of corn, on average, will yield 87,000 gallons of ethanol per year. Even Texas ain’t that big.
That's funny!
There’s always a spread.
But the trades are executed at a price, not at a spread.
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