China's clampdown on equity trading has prompted speculators to bet on commodities instead, sayEmiko Terazono and Lucy Hornby in the FT. Take the bubble in the garlic market.
The wholesale price in China, which accounts for more than 80% of the world's garlic exports, has risen since 2015 as heavy rains damaged the crops planted for the 2016 harvest. People began to hoard garlic, while speculators have now piled in, propelling prices to multi-year highs.
Mung beans and pickled walnuts are other niche markets to have "fallen to the vagaries of hot money'".
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Viewpoint
Economists are bad at short-term forecasts, especially when it comes to assessing the impact of anticipated shocks, where... prejudice dictates the prediction. But they tend to be much better at the longer-term implications, and I do worry that we are starting to fall prey to the very reverse of Project Fear call it Project Delusion where to express almost any vaguely negative view on economic prospects is to be labelled "unpatriotic". What's required is realism and honesty economic conditions are going to get tougher, but so long as cool heads prevail, not disastrously so. Time for Project Reality.
Jeremy Warner, The Sunday Telegraph
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