Xinhua News Agency, Beijing, August 21 - Title: Why the Rise? When to Stabilize? - An Insight into the Current Trend of Vegetable Prices

"Vegetable prices have soared to 'New Year prices'," "cucumber prices have surged by 150%," "the peak prices for sponge gourd and red chili reached 20 yuan per kilogram"... Recently, many netizens have reported on social media that the prices of some vegetables have risen significantly. Reporters have recently conducted research in Beijing, Shandong, Guizhou, Hainan, and other places and found that factors such as high temperatures and heavy rains have driven up vegetable prices. However, after the short-term and seasonal impacts subside, prices are expected to gradually stabilize.

Vegetable prices are higher than the same period in previous years

At the Beijing Xinfadi Agricultural Products Wholesale Market, reporters saw crowded refrigerated trucks and box trucks with their rear compartments open, displaying neatly stacked bundles of vegetables. "The Chinese cabbage used to be 0.8 yuan per jin, but it has risen to more than 4 yuan this month," said Ms. Wang, a vendor, who noted that the Chinese cabbage she sources from Xianghe, Hebei, has been affected not only by the local heavy rain which affected the yield but also increased the difficulty of sourcing.

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A person in charge of the Xinfadi market told reporters that on August 19, the weighted average price of vegetable wholesale at the Xinfadi market was 4 yuan/kg, a 37.93% increase from last month and a 28.21% increase from the same period last year. According to statistics, the price in mid-August this year is at the highest point in the past five years for the same period.

Traditional summer and autumn vegetable production areas such as the Huang-Huai-Hai region, the middle and lower reaches of the Yangtze River, and the Bohai Rim region have also seen an increase in vegetable prices. The Shouguang Agricultural Product Logistics Park's monthly vegetable index review showed that among the ten major vegetable category indices monitored in July, seven rose. From August 12th to 18th, among the ten major vegetable category indices monitored, nine rose, with significant increases in categories such as Chinese cabbage, bean vegetables, leafy vegetables, and aquatic vegetables.

In a supermarket in Anqing, Anhui, many citizens were shopping in the vegetable section. Citizen Ms. Wang told reporters that in the past half month, the overall vegetable prices have risen, especially the prices of fresh leafy vegetables such as spinach and Shanghai green have increased significantly.

From May to October each year is the off-season for the production of melons and vegetables in Hainan. Due to the limited local vegetable production, supply needs to be transported in large quantities from outside the island. "This year, the excessive rainfall in the main vegetable-producing provinces has affected the yield and further increased the prices. At present, the average purchase price of all kinds of vegetables has increased by 1 to 1.5 yuan per jin," said Chen Jianhua, the head of the agricultural production department of Haikou City's Vegetable Basket Food Engineering Co., Ltd.

Data from the National Bureau of Statistics show that in July, the price of fresh vegetables rose by 9.3% month-on-month and by 3.3% year-on-year. The "vegetable basket" product wholesale price index released by the Ministry of Agriculture and Rural Affairs rose from 111.57 on June 20 to 134.11 on August 20, an increase of 20.2%; the average price of the 28 key monitored vegetables rose from 4.32 yuan/kg to 6.09 yuan/kg, an increase of 40.97%.

Multiple factors have driven up vegetable prices

The combination of factors such as high temperatures, heavy rains, and increased transportation costs has led to the rise in vegetable prices. Experts suggest that the vegetable supply and demand situation is expected to improve in the future, and prices are likely to gradually stabilize after the short-term and seasonal impacts fade away.From the perspective of historical patterns, vegetable prices exhibit seasonal fluctuations. During the months of July and August, the high temperatures and frequent rainfall are not conducive to the growth of vegetables in the open fields, and it is common for vegetable prices to enter an upward trend at this time each year.

Why have vegetable prices increased more this year?

Extreme weather is a significant factor. Zhang Jing, a researcher at the Institute of Agricultural Information, Chinese Academy of Agricultural Sciences, explained that this summer, there was an overall excess of rainfall in China, with regions such as Hunan, Shandong, Sichuan, and Anhui experiencing heavy rain, thunderstorms, and strong convective weather, including gales. Some areas also suffered from flooding disasters, which hindered local vegetable production, harvesting, and transportation.

The adverse weather has greatly troubled many vegetable growers. "Affected by the high temperatures and humidity of this summer, along with other variable climatic conditions, there has been an increase in pests and diseases, leading to a decline in vegetable quality and a relative reduction in yield," said Zhang Chunbao, the person in charge of the Chenglin Vegetable Professional Cooperative in Shouguang City, Shandong Province.

Xin Dengqing, a vegetable farmer from Xinjiaqiao Village in Hualong Town, Shouguang, with over a decade of experience in vegetable cultivation, told reporters that due to frequent rainfall coupled with persistent high temperatures, the growth of vegetables in the greenhouses was not as good as in previous years. To mitigate the impact of the high temperatures, shading nets and cooling agents were used on the greenhouse films, which reduced the damage from heat but increased the cost of cultivation.

On July 5th, in Zhoufang Village, Jiayi Town, Pingjiang County, Hunan Province, villagers were cleaning the silt from the agricultural ditches.

High temperatures and continuous heavy rainfall not only led to a decrease in vegetable production but also affected the quality of vegetables, increasing the difficulty of harvesting and the costs of storage and preservation. Moreover, the separation of vegetable production and consumption areas in China has further increased logistics costs due to inter-regional transportation.

"The provinces with higher vegetable production volumes account for a significant proportion of the national supply. The heavy rains and other weather conditions during this summer have had a certain impact on the inter-regional transportation of vegetables, especially fresh leafy greens, leading to an increase in procurement and logistics costs, and thus temporarily pushing up the retail price increases," said Guo Liyan, Deputy Director of the Economic Research Institute at the China Macroeconomic Research Institute.

However, industry insiders have pointed out that the rise in vegetable prices this year is different from the "ginger army" and "garlic you ruthless" price monopoly phenomena that have occurred in the market. The high cost of cold storage and the high rate of spoilage for fresh leafy greens, coupled with the local implementation of the "vegetable basket" mayor responsibility system, make the illegal costs of price manipulation and hoarding high, making the possibility of capital speculation unlikely.

Prices are expected to gradually stabilize.How will the price of vegetables trend in the later period? Industry insiders analyze that the growth cycle of vegetables is relatively short. After the short-term impact and seasonal factors fade, the vegetable production in areas affected by disasters gradually recovers, and the vegetables that were delayed in going to market will be successively launched, with the market supply expected to continue to increase, and prices will gradually stabilize.

Data from the Ministry of Agriculture and Rural Affairs shows that currently, the national vegetable area in the field is 1.06 million hectares, an increase of 900,000 hectares compared to the same period last year, still at a relatively high level within the year, with a foundation for stable production and supply.

"Although seasonal factors for price increases still exist, and some varieties may face difficulties in the transition of planting, the later period will see the gradual entry of the harvest season for cool-season vegetables in the north and high mountain and plateau areas, with ample market supply, and it is expected that the upward space for vegetable prices is limited," said Zhang Jing.

Shanghai has organized vegetable production bases to strengthen field management and harvesting operations, and to rush the planting of heat-resistant fast-growing vegetables such as chicken feather vegetables and rice amaranth; Beijing has coordinated major wholesale markets such as Xinfadi to further expand supply channels, and has organized large chain supermarkets and direct supply enterprises to increase the strength of direct procurement from the base... From the production front end to the retail end, various measures have been taken in various places to stabilize the people's "vegetable basket."

Shandong Weifang Shouguang is an important national vegetable production base and distribution center. In the Shouguang Agricultural Product Logistics Park, it is already busy at 3 a.m. Vegetables such as tomatoes, cucumbers, cabbage, celery, and zucchini from Hebei, Inner Mongolia, Ningxia, Shanxi, Shaanxi, and the Northeast are traded here, with a current daily transaction volume of about 6,000 tons.

"To cope with high temperatures, we have accelerated the pace of purchasing and selling, and shortened the time vegetables stay in the market. At the same time, to stabilize vegetable prices, the logistics park has continued to work hard in strengthening the connection between production and sales, and the concentration and distribution of vegetables, by adjusting transportation around the area and increasing the storage of vegetables, to make the 'vegetable basket' of citizens in various places more stable," said Wang Haitao, a member of the Shouguang Municipal Bureau of Commerce.

In the Shouguang Agricultural Product Logistics Park in Shandong, staff are busy. (Photo provided by the interviewee)

In Weining County, Guizhou Province, vegetable planting large household Liu Zhi is busy sending 20 tons of cabbage to Chengdu, Sichuan. "Our altitude here is more than 2,000 meters, suitable for planting off-season vegetables. The vegetables that are currently picked are directly transported to other provinces, such as cabbage and pea tips mainly to Sichuan and Chongqing, and red vegetable rape mainly supplied to Shanghai, Beijing, Xi'an, Wuhan, and other places," said Liu Zhi.

The person in charge of the Ministry of Agriculture and Rural Affairs said that in response to the recent disastrous weather, the "vegetable basket" mayor responsibility system will be tightened, the vegetable variety structure, planting scale, and market phase will be reasonably arranged, and the main production areas will be guided to strengthen the supply and demand docking with large and medium-sized cities, and strengthen the production situation of "vegetable basket" products and market dynamic monitoring to ensure sufficient supply and stable prices.