(Photo credit: zigazou76)
Should we get used to ever-increasing food prices? Farmers’ margins are razor thin and many are even losing money because food crops are priced well-below the cost of production. This is largely a result of higher production costs for fertilizer, energy, labor, insurance and machinery juxtaposed with stiff price competition. (CNBC)
Meanwhile, Indian consumers have responded to high food inflation by down-trading from expensive soya and groundnut oil to more affordable palm, cottonseed and sunflower oils. Sales of private labels and the smaller regional brands have also picked up. (ET)
Are long-dated options finally catching on in India? FIIs have started building long-term bets on the Nifty index through options contracts expiring as far ahead as 2014, as the conventional method of using futures to bet on the markets becomes more expensive. (ET)
In our continuing take-down of China:
The HSBC China Services PMI drops to a 3-month low of 50.6 in June from 51.9 in May as conditions point to declining new business orders and a softening job market.
An example of credit gone mad: Buyers of concrete mixing machines are doubling up on their debt by using new machines as collateral for further loans. The concrete mixing companies are then selling their ready mixed concrete on credit to cash-strapped property developers. For one machine seller, more than half of the concrete machines sold in the first quarter had not even been switched on – customers were putting the machines in storage and using them as collateral to raise further loans to generate cash that they need to pay salaries, electricity bills and buy raw materials. (FT)
Euro Stoxx 50 -0.5%, London -0.2%, Paris -0.5%, Frankfurt -0.3%. US closed.