Food prices surge in China.

Grim news from China:-

a) Inflation rate is at 4.9% (Jan '11) compared to 4.6% (Dec'10)

b) Jan'11 : Surges include

Eggs up by 20%

Fresh fruits by 33%

Sugar up by 80%

High grade rice more by 65%

c) What this means is that millions of the poorer Chinese households which spends half their income on food will experience severe economic setbacks - 50% spending of income on income might translate up to 70%.

d) Remember also that crude oil is now at USD$100 and standing by. The Chinese folks still needs to pay for transport somehow.

e) Food prices hikes were recognised as one of the catalyst in bringing down the governments of Tunisia and Egypt.

Inflation fears - PLUG NUMBER 1

Both NST and Malaysian Insider shows this:-

http://www.btimes.com.my/Current_News/BTIMES/articles/2infdeepens/Article/index_html

I understand that the prices of raw food commodities (there goes my banana leaf rice budget) and oil are now increasing - some by 20% for the last 6 months alone re Paul Krugman (Nobel prize winner for New Economics).

Marketing wise, does this show that the 'powers-that-be' are hinting that inflation is to be expected especially after the sudden increase of RON 97 to RM 2.50/liter post-Tenang? Are they preparing us mentally to be hit in the most sensitive location for all men and women : our pocketbooks?

A good friend remarked that after every by-election win, the prices of cooking gas, RON 97, sugar, evaporated milk, etc. seemingly rise almost the very next day.

My shameless commercial plug? Buy some commodity related unit-trusts frens!