subject: The Oil Price Increases Again [print this page] This year witnessed a fluctuating price of daily goods. The price of lots of goods has increased at a certain rate. The increasing oil price brought new pressure to the increasing price of goods. Though most enterprises indicated that there was no plan to increase the price under the present government price-control, the terminal price has increases quietly. As far as I am concerned, the reasons are as follows.
First of all, marketing the terminal price increased quietly. Luhua, the third top brand in the food oil market in China, increased the price of the peanut oil recently. As a result, other middle-sized and small-sized enterprises might follow its example soon. We can see that this is only the first step to the price increase if the government relaxes its control on oil price and it is predicted that the price of soybean oil, corn oil and other oil would increase at the same time. The following data can provide some evidence for this tendency. From June 27th to July 3RD, the retailing price increased by 0.2%. The prices of Jinlongyu and Huifu were 57.9 yuan and 51.5 Yuan RMB separately in April. However, they increased to 59.8 Yuan and 54.5v Yuan separately in June. It is the market that required the oil price to increase.
The second factor is realitythe intensified deficit of the soybean processing. Though the price-control policy has a great influence on enterprises, it cannot reach a balance between price and policy. On one hand, with the increasing cost and low selling middle-sized and small-sized enterprises have no choice but to limit their production. Nowadays, the cost price of the soybean is over 4000 Yuan RMB per ton and the intensified deficit condition is much more severe. In order to maintain their enterprises, they strong demand for allowance of the oil price. On the other hand, the shortage of soybean material worsened the condition. An investigation shows that the price of the soybean will increase later and then the soybean purchasing will be much more difficult and thus leads to the increase of oil price.
The third factor is the inflation. After the announcement of CPI in June, the market predicted that the commodity price would recover soon. However, the increasing pressure is still very heavy. Additionally, the decrease of the soybean production overseas would support the increase of the oil price.
From the above factors, we can see that the condition is still very serious and we are expecting the government to put forward solutions to this problem.
