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Speculators drive the prices of mung beans up

By Nie Peng (chinadaily.com.cn)
Updated: 2010-05-18 11:59

As the property market begins to show signs of cooling, agricultural produce such as garlic and mung beans have won favor from speculators.

The wholesale price of mung beans in Beijing has soared from 9 yuan a kilogram at the end of March to 18 yuan now, owing to market speculation as well as a drought in southern China that has seen a reduce in the output of green beans, the Beijing Business Today reported Tuesday.

The retail price of mung beans at supermarkets was around 26 yuan per kg, the paper said.

An industry insider surnamed Wang said that speculators started to hoard mung beans as early as last fall, buying at a price of about 4 yuan per kg.

"The price of mung beans would definitely rise when summer nears each year, but the increase has not been so dramatic," Wang said, adding that speculators kept a close watch on mung beans earlier than usual last year because of the reduced output.

Wang noted that farmers were also hoarding their produce, hoping to get a good price from purchasers.

Some wholesalers have hoarded as many as hundreds of tons of mung beans and smaller ones 20 to 40 tons, with even more eager to join, according to Wang. But newcomers have difficulty in finding warehouse space at an affordable price as garlic speculators have already driven rents higher, he explained.

Related readings:  Govt steps up efforts to curb rising garlic prices  Speculators blamed for garlic price hikes in China

Just as the Chinese government said it was determined to curb speculation on the overheating property market, the vegetable market was heating up, the official Xinhua News Agency reported last week, citing Dai Zhongjiu, director of the China Vegetable Circulation Association.

Expecting the housing prices to drop, home buyers tend to choose a wait-and-see attitude. For instance, April housing sales in Beijing fell 41 percent from March, according to the Beijing municipal bureau of statistics.

Speculators have been trading garlic for profits, making its price soar since the end of last year, the Xinhua report said.

The wholesale price of garlic surged more than 10 fold from a year earlier to about 12.2 yuan per kg at the end of April, while the average price of vegetables surged about 25 percent from a year ago, the National Bureau of Statistics said.

However, some dealers said they were not worried about sales of mung beans in summer, but as they did profit much from the business and were facing increasing risks, they wanted to sell fast by cutting prices, the paper reported, adding that there has already been a slight drop in the wholesale prices of mung beans.