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China’s food prices – why have they trended up and what lies ahead?

Louis Kuijs's picture
China’s food prices – why have they trended up and what lies ahead?

(Available in Chinese)

Food prices have received a lot of attention recently. Understandably, much of the attention is on recent developments and short term prospects. But in this blog post I try to look back at some longer term trends, in order to look further ahead.

Since the early 2000s, food related prices have trended up (Figure 1). The deflator of agricultural value added has risen 8% per year on average since 2000, after falling during the second half of the 1990s. Producer Price Index (PPI) food prices (factory gate) have risen much less because prices of other inputs into the food processing industry have gone up less and rapid productivity growth in food processing has dampened the transmission of higher raw food prices.

ปลาหมึกพอลพยากรณ์เศรษฐกิจไทย: เคลื่อนไหวด้วยหนวดเส้นเดียว

Frederico Gil Sander's picture

 

Image courtesy of Caitfoto through a Creative Commons license
(Originally posted in English)

หลังจากที่คณะผู้จัดทำรายงานตามติดเศรษฐกิจไทยของธนาคารโลกได้รับความช่วยเหลือจากทั้งหมอดูลายมือเขมรและหมอดูกระดองเต่าผู้โด่งดัง ให้สามารถจัดทำตัวเลขประมาณการด้านเศรษฐกิจของไทยในปี 2553 ให้เสร็จสมบูรณ์ไปแล้วเมื่อเดือนเมษายนที่ผ่านมา    ทีมงานของเราก็แอบไปได้ยินข่าวคราวเกี่ยวกับหมอดูแม่น ๆ คนใหม่ที่โลกทั้งใบต้องตื่นตะลึงในความถูกต้องแม่นยำของเขา  ผมจึงต้องตาลีตาเหลือกไปจ้างหมอดูท่านนี้มาเป็นที่ปรึกษาเป็นการด่วน ทั้งนี้เพื่อให้แน่ใจว่าตัวเลขประมาณการด้านเศรษฐกิจที่ธนาคารโลกจะนำออกเผยแพร่แก่สาธารณชนในเดือนมิถุนายนนั้นใกล้เคียงกับความเป็นจริงที่สุด ไม่อย่างนั้นเสียชื่อนักเศรษฐศาสตร์ฟันธงหมด

Paul the Octopus' forecast on the Thai economy: Swimming with one tentacle

Frederico Gil Sander's picture

Image courtesy of Caitfoto through a Creative Commons license
(Available in: ภาษาไทย)

Following the very successful earlier engagements of a Khmer palm reader and a celebrity turtle-shell fortune teller, the Thailand economic team has recently hired the forecasting star of the moment to divine the future of the economy. I am not talking about Professor Nouriel “Dr. Doom” Roubini, but Octopus Paul, who had to escape Germany in a hurry to avoid becoming “pulpo a la Gallega”. For a hefty fee of a five shrimps, the wise cephalopod spent a few hours in our offices sharing his prognosis for the Thai economy.

Should Malaysia's new growth model favor manufacturing or services?

Philip Schellekens's picture

As Malaysia redefines its growth strategy, the question of which sector to promote has been a subject of ongoing debate. Some have argued that the strategy should emphasize manufacturing – and preferably high-tech manufacturing – as innovation activity is most forthcoming in this sector. Others have countered that services are key, as the typical economic structure of an advanced economy is oriented towards services. Tradable services are also fast becoming an engine of growth.

In Thailand, finding the way back into growth: Step 1, switch the supply chains back on

Frederico Gil Sander's picture

As part of its regular monitoring of the corporate sector in Southeast Asia, the World Bank economic team I am part of in Thailand has been working on a short case study of supply chains of Japanese multinational companies (MNCs) in the electrical and electronics (E&E) industry. We wanted to hear directly from firms about how the crisis affected them, how they were able to adjust so quickly to the drop in demand, what the rebound looked like, and what were the prospects going forward to upgrade along the value chain. I have learned a great deal from these interviews, and have become convinced that supply chains are central to understanding the current crisis in Thailand and East Asia more generally.

Some facts: the crisis had a disproportionate impact on manufacturing. In Thailand, manufacturing represents about 40 percent of GDP, but contractions in manufacturing value added have accounted for about 75 percent of the contraction of headline GDP. Within manufacturing, the auto and E&E industries account for the bulk of the contraction. Most of the output in those industries is exported, and more than three-fourths of the decline in Thai exports during the crisis was due to falls in shipments from the auto and E&E industries. My conclusion is that the magnitude of the crisis in Thailand has been driven primarily by these two industries.

Regional Finance Roundup: Is East Asia leading the world out of the crisis?

James Seward's picture

Given that Asia is now widely seen as leading the world out of the crisis, it is fitting that the role of Asia was more prominently recognized in the global economic system in the recent G20 meeting held in Pittsburgh.  Since we last looked in July, the outlook for the emerging markets of East Asia has continued to brighten.  The latest regional forecasts come from the Asian Development Bank in its Asian Development Outlook (pdf) published last week.  It points to “the rapid turnaround in [Asia’s] largest, less export-dependent economies” and predicts that “the regional economy is now poised to achieve a V-shaped rebound.”  These are very positive words indeed!  As the graph below shows, the ADB has in fact upgraded its growth forecasts for a number of economies for 2009.

Although the signs are pointing upwards, performance is still mixed in a number of key areas.