Garlic – the hottest commodity in 2009
- Posted by Ivanhoff
- on November 26th, 2009
Garlic prices in China are skyrocketing. One vendor in a vegetable market in Beijing’s Chongwen district says that the price of garlic has gone from 0.8 yuan per kilogram in February to 8 yuan now. In Shandong’s Jinxiang county, China’s largest garlic production and trading base, the price has jumped forty-fold from March.
At first, some people attributed the astonishing price surge to H1N1. Throughout the ages, residents of north China have eaten garlic to ward off flu.
Economists may have a better explanation. They believe that the garlic bubble is being inflated by massive bank lending designed to stimulate the economy, which is now leaking into speculative assets. At the same time, the amount of land under garlic cultivation has fallen sharply, leading to a demand-supply imbalance.
“Too much liquidity in any market can lead to speculation,” says Morgan Stanley in a research note, commenting on the garlic price boom.
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My name is Ivan Hoff. I am a stock trader. I manage Stocktwits 50, Stocktwits Email and was featured in The Stocktwits Edge, which I edited. (More) -
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