AGRI-FOOD THOUGHTS - China Consumer Boom Means Higher Soft Commodity Prices :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

AGRI-FOOD THOUGHTS - China Consumer Boom Means Higher Soft Commodity Prices :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website: "As incomes rise in China and India, their consumers will dictate prices for oil and food. Their preferences are setting relative prices of nearly all commodities. These preferences have shifted to reflect their higher incomes, and will continue to do so. Chart below portrays per capita consumption of beef and rice by Chinese consumers, per UN FAO. Beef is now a preferred item on the menu at Chinese homes. Magnifying this shift is number of consumers in China and India. Such preference shifts have caused prices of grains and meats around world to rise. Higher beef consumption means raising more beef. Raising more beef means using more grain. More grain is consumed to feed the beef than is freed up from eating less rice. Agri-Food growth cycle that has emerged is really that simple."