Ginger price hits a ten-year high, information asymmetry problem once again comes to the fore
Xinhua News Agency Nanjing, August 12 (Reporter Nie Ke) As the "pushing ginger prices up again" phenomenon strikes once more, agricultural product prices have once again drawn people's attention. In the first half of last year, ginger prices were still very sluggish, but this summer they have hit a ten-year high, even surpassing the first wave of the "pushing ginger prices up again" in 2010. Market
Xinhua News Agency Nanjing August 12 (Reporter Nie Ke) As the “pushing ginger prices up again” phenomenon strikes once more, agricultural product prices have once again drawn people's attention. In the first half of last year, ginger prices were still very sluggish, but this summer they have hit a ten-year high, even surpassing the first wave of the “pushing ginger prices up again” in 2010. Relevant market observers believe that the frequent “price roller coaster” rides of agricultural products are a common occurrence in the market under conditions of information asymmetry.
“Pushing ginger prices up again” strikes once more
“This is already the lowest price in the whole market.” In the Kexiang vegetable market in Nanjing, Jiangsu, vegetable vendor Old Xu pointed to ginger priced at 10 yuan per jin and told the reporter. Having sold ginger for nearly ten years, Old Xu had never sold it at such a high price.
On Old Xu's vegetable stall were laid out chives, loofah, Chinese cabbage and other agricultural products, but only the ginger was put in a plastic bag and tied up. “Now that ginger is so expensive, fewer people are buying it too.” Old Xu said.
The reporter saw that in a large supermarket next to the Kexiang vegetable market, the price of ginger reached 14.8 yuan per jin. According to Shen Jia'an, office director of the Nanjing Agricultural and Sideline Products Logistics Center, as Nanjing's first-tier wholesale market for agricultural products, since August the highest price for ginger at the logistics center could reach 8.5 yuan per jin, while in May last year the average price of ginger was only just over 1 yuan per jin.
According to monitoring statistics from the Nanjing Price Bureau, from August 1 to 7, the average price of ginger citywide was 10.7 yuan per jin, while the price in the same period last year was 5.1 yuan per jin, more than doubling.
High ginger prices are already a common phenomenon across the country. According to monitoring by Xinhua News Agency's national agricultural and sideline products and agricultural trade price quotation system, at present about 70 percent of provinces, autonomous regions and municipalities have ginger prices exceeding 10 yuan per jin, and ginger prices are rising in all provinces, autonomous regions and municipalities.
Small producers, “following the crowd”
Because last year's “toxic ginger” incident sharply pushed down ginger prices, many producers rushed to “flee” the ginger market. It is understood that in Laiwu, Shandong, the ginger planting area in 2011 was 100,000 mu, and in 2013 it was only 59,000 mu, a decrease of nearly half.
Zhao Chengfa of the Agricultural and Sideline Products Cooperative in Yishui County, Shandong Province, told the reporter that because last year's ginger output was relatively small and this year's ginger would not be harvested until October, ginger has remained in short supply, and prices have therefore risen steadily. “We only look at the price. Last year the price was so low, so we planted less.” Zhao Chengfa explained the reason for this year's ginger shortage in this way.
With the continuous development of information technology, price fluctuations in local markets quickly affect the overall market. “Once the price over in Shandong goes up, we can only follow and raise ours too.” Old Xu said.
In the view of Zhou Yingheng, a professor at the College of Economics and Management at Nanjing Agricultural University, this is a manifestation of the mismatch between the pattern of small-scale production and circulation and the increasingly integrated market. Zhou Yingheng said that current agricultural production is still small-scale production. Although China currently has nearly 1 million cooperatives, only one tenth are relatively large, scaled cooperatives, and most cooperatives are in fact still scattered small producers. “Small producers do not understand market conditions and can only passively adapt to the market according to prices.” Zhou Yingheng said.
When will they stop going “by feel”
How should the situation of market information asymmetry be handled? Regarding statistical information publicly released by the government, Zhao Chengguang said bluntly that he “does not pay much attention” to it. Due to the lack of detailed data, producers like Zhao Chengguang can only rely on market prices and decide next year's output by feel.
Zhou Yingheng believes that the government's role in the market is very important, and it should become a service provider rather than an intervener. “A few years ago pork prices were very high, and the government intervened in the market. Although prices were stabilized, it caused harm to farmers.” Zhou Yingheng said that the government should do a good job of integrating and publicly releasing information so that both buyers and sellers fully understand the market; at the same time, it should also support scaled production so that producers have the ability to cope with price fluctuations.
At present, there are still some problems in the integration of market information. A relevant official of the Nanjing Price Bureau said that although price statistics now exist, they are all after-the-fact actions and also lack effective market forecasting, making it difficult to provide advance guidance to producers.
In this regard, Zhou Yingheng believes that existing technology can already count market information fairly accurately, and regular, scientific and authoritative information statistics and release are conducive to the health of the market.
Shen Jia'an, however, said he hopes there can be third-party institutions to serve as “advisors.” “If an institution can achieve detailed statistics and forecasting and profit by selling it as an information product, it can attract more institutions to produce higher-quality agricultural product information.” Shen Jia'an said.
“Pushing ginger prices up again” strikes once more
“This is already the lowest price in the whole market.” In the Kexiang vegetable market in Nanjing, Jiangsu, vegetable vendor Old Xu pointed to ginger priced at 10 yuan per jin and told the reporter. Having sold ginger for nearly ten years, Old Xu had never sold it at such a high price.
On Old Xu's vegetable stall were laid out chives, loofah, Chinese cabbage and other agricultural products, but only the ginger was put in a plastic bag and tied up. “Now that ginger is so expensive, fewer people are buying it too.” Old Xu said.
The reporter saw that in a large supermarket next to the Kexiang vegetable market, the price of ginger reached 14.8 yuan per jin. According to Shen Jia'an, office director of the Nanjing Agricultural and Sideline Products Logistics Center, as Nanjing's first-tier wholesale market for agricultural products, since August the highest price for ginger at the logistics center could reach 8.5 yuan per jin, while in May last year the average price of ginger was only just over 1 yuan per jin.
According to monitoring statistics from the Nanjing Price Bureau, from August 1 to 7, the average price of ginger citywide was 10.7 yuan per jin, while the price in the same period last year was 5.1 yuan per jin, more than doubling.
High ginger prices are already a common phenomenon across the country. According to monitoring by Xinhua News Agency's national agricultural and sideline products and agricultural trade price quotation system, at present about 70 percent of provinces, autonomous regions and municipalities have ginger prices exceeding 10 yuan per jin, and ginger prices are rising in all provinces, autonomous regions and municipalities.
Small producers, “following the crowd”
Because last year's “toxic ginger” incident sharply pushed down ginger prices, many producers rushed to “flee” the ginger market. It is understood that in Laiwu, Shandong, the ginger planting area in 2011 was 100,000 mu, and in 2013 it was only 59,000 mu, a decrease of nearly half.
Zhao Chengfa of the Agricultural and Sideline Products Cooperative in Yishui County, Shandong Province, told the reporter that because last year's ginger output was relatively small and this year's ginger would not be harvested until October, ginger has remained in short supply, and prices have therefore risen steadily. “We only look at the price. Last year the price was so low, so we planted less.” Zhao Chengfa explained the reason for this year's ginger shortage in this way.
With the continuous development of information technology, price fluctuations in local markets quickly affect the overall market. “Once the price over in Shandong goes up, we can only follow and raise ours too.” Old Xu said.
In the view of Zhou Yingheng, a professor at the College of Economics and Management at Nanjing Agricultural University, this is a manifestation of the mismatch between the pattern of small-scale production and circulation and the increasingly integrated market. Zhou Yingheng said that current agricultural production is still small-scale production. Although China currently has nearly 1 million cooperatives, only one tenth are relatively large, scaled cooperatives, and most cooperatives are in fact still scattered small producers. “Small producers do not understand market conditions and can only passively adapt to the market according to prices.” Zhou Yingheng said.
When will they stop going “by feel”
How should the situation of market information asymmetry be handled? Regarding statistical information publicly released by the government, Zhao Chengguang said bluntly that he “does not pay much attention” to it. Due to the lack of detailed data, producers like Zhao Chengguang can only rely on market prices and decide next year's output by feel.
Zhou Yingheng believes that the government's role in the market is very important, and it should become a service provider rather than an intervener. “A few years ago pork prices were very high, and the government intervened in the market. Although prices were stabilized, it caused harm to farmers.” Zhou Yingheng said that the government should do a good job of integrating and publicly releasing information so that both buyers and sellers fully understand the market; at the same time, it should also support scaled production so that producers have the ability to cope with price fluctuations.
At present, there are still some problems in the integration of market information. A relevant official of the Nanjing Price Bureau said that although price statistics now exist, they are all after-the-fact actions and also lack effective market forecasting, making it difficult to provide advance guidance to producers.
In this regard, Zhou Yingheng believes that existing technology can already count market information fairly accurately, and regular, scientific and authoritative information statistics and release are conducive to the health of the market.
Shen Jia'an, however, said he hopes there can be third-party institutions to serve as “advisors.” “If an institution can achieve detailed statistics and forecasting and profit by selling it as an information product, it can attract more institutions to produce higher-quality agricultural product information.” Shen Jia'an said.