You’ve mentioned that you’re a major investor in agriculture, which over the past few years has been prone to serious government interference. How do trade barriers impact your overall trading strategy?
In the end, all trade barriers just make [shortages] worse. Look at the Philippines, they started putting up trade barriers and price controls and because of that they ran out of rice. Politicians love price controls, it’s not them out in the fields working 14 hours a day. And the consequences: the Philippines had to get handouts. If you have your own rice you’re better off. [As the situation escalates] it usually turns into a bubble — which is how it will work out this time — and people who have food will make a lot of money, because in the end, when the politicians are done blaming the speculators, and the store owners, and the farmers, the only way to deal with this problems is to raise prices and give people incentives to go out there and produce the food.
Well, bio-fuels raise prices. Politicians love it because they can buy votes – curse Middle-easterners. But as long as there is interest in bio-fuels it will continue to drive demand. It also makes the water problem worse.
via China International Business
No comments:
Post a Comment