Sunday 27 February 2011

Chinese Speculators, Dog Biscuits And Fairtrade Fortnight

This is a busy time of the year for ginger growers in Thailand as crops are being harvested, processed and exported. It should also be a profitable time but this year exports have been severely reduced because Chinese ginger prices are lower. This should be a classic example of free-market competition but in reality is an example of commodity speculation. Chinese speculators have been buying huge quantities of ginger at low prices which forces the market price down. They then buy more at a higher price and wait for the market price to rise. When the price has risen sufficiently, the speculators offload their stocks bought at the low prices and pocket the difference. Last year the Chinese government intervened to prevent speculating and hoarding in an attempt to re-introduce a level playing field. Unfortunately, the Chinese government measures were implemented too late to prevent the Thai harvest coinciding with the low price point in the speculation cycle.

The Organic Hound Company from New Hampshire, USA, last week announced the launch of a range of organic dog biscuits which includes Organic Pumpkin Ginger for dogs with sensitive systems. Apparently many dogs suffer from sensitive stomachs and nerves during thunderstorms and car journeys and they can be calmed and settled by eating ginger.

The Indian Commodity Exchange (ICEX) has announced that it will soon start to trade ginger from Nagaland, a state in the far north-east of India. In the past, Naga farmers have only grown enough ginger for home consumption. Now these farmers are being asked to produce a surplus to trade. This follows a scheme in Sikkim, another north-eastern state, where ginger farmers have received state-funded ginger 'seed' and federal government training.

This year's UK Fairtrade Fortnight will be held from 28th February - 13th March. Fairtrade is a scheme which aims to provide better prices and working conditions for farmers and workers in the developing world. Fairtrade Fortnight encourages supporters and Fairtrade-accredited business to actively promote the scheme.

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