As an importer of China frozen vegetables we understand the problems that China is currently facing. Labor cost is rising, energy cost is rising and this last year China has been plagued by weather related problems from typhoons, to draught, to abnormal rain fall. Needless to say that with the gradual appreciating of the RMB (Chinese currency) all things point to higher pricing. How is it that our customers think that pricing should be the same as last year? Oh yes, I understand they want last years pricing but it is not realistic given the current situation.Â
I just read on Bloomberg today that China food inflation for vegetables is up nearly 30%, pork prices have increased by 55% and 3 people were killed in Chongqing stampeding for cooking oil. (You can read the article here). Food inflation is now impacting other areas in China with overall inflation at 6.5% matching a decade high.
In the past, often we would see our customers delay and delay until pricing came down as suppliers began to panic. This year I believe the opposite is the wise thing to do. Contract now, before the season starts, for your requirements and needs. Those who delay may face the consequences of not getting any product. The choice is yours.
Yes food inflation is reality.
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