Monday, 3 March 2014

When China wakes up, the world will shake


 
The above quotation which is attributed to Napoleon during his exile at St Helena is almost 200 years old. It was an extremely prescient view and certainly resonates today.

 

During the last decade we all saw the results of the dynamic Chinese export programme as goods poured into the US and EU markets.

 

In tandem with its export led growth we have witnessed a marked step up in acquisition of assets by China following the recent economic problems particularly in the US.

 

However there is another factor emerging as China steps up its demand for raw materials particularly agri commodities.

 

The burgeoning Chinese middle class will continue to demand products which traditionally consumed in the Western world.

A case in point is the increased purchasing by China of Almonds. A “Young at Heart” campaign in China focussed on the idea of “perpetually feeling good” fuelling demand and resulting in price hikes for this premium nut product.

 

As dietary patterns in China become more westernised this will lead to upward price pressure in all sectors of the food industry.

 

This demand will only continue to grow and it will surely become a case for Western consumers of “wake up and smell the Coffee” – whilst you can.

 

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