The rise of Chinese vegetable prices explained

The prices of Chinese vegetables have recently and steadily increased. We examined the reasons for this development:

1. The cost price of vegetables is growing. This is on the one hand because industrialization and urbanization force agriculture from the suburbs. On the other hand, the growing cities attract labor from the countryside which leaves farmers without sufficient manpower. In addition, the cost price of agricultural resources such as fertilizer, pesticide, water, and electricity, all continue to rise. This in turn pushes the vegetable price upward.

2. The price of transport is rising. The journey from farm to plate is long and includes purchase, transport, wholesale, and retail. Each segment adds to the final price, not in the least because each step along the way results in product loss. Summer vegetables also require refrigerated storage. The cost price in these segments is rising, and that results in a higher retail price.

3. The supply chain contains too many segments, and all intermediaries select trade targets and trade methods that provide them with the greatest profit, without consideration for consumers. The final retail price is the result of profit-driven supply chain management, and consumers pay the price for expensive vegetables.

Source: Jinri Toutiao

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