Cabbage patch economics

Sometimes too much of a good thing can spell trouble. For China's vegetable farmers, forecasting market conditions can be a whole new learning curve. Jin Zhu reports.

Wang Jianyun is a typical smallholder farming in the suburbs of the Chinese capital. This year he harvested 20,000 kilograms of cabbages, a good harvest by any standards. But it's going to be a cold winter for this farmer. After waiting almost 12 hours at a wholesale market in Daxing, Beijing, he is going home, and there are still 500 kg of unsold vegetables in the back of his truck. "So far, I've sold about 5,000 kg of cabbage. Another 15,000 kg of cabbage are now still piled in the field now," he tells us. The price he got for his cabbages ranged from 14 to 16 jiao, or about 2 cents to two-and-a-half cents. "I'm just trying to end my troubles now, not to make money," Wang, 53, says. He will not be bringing home any profits.

This scenario is common all over China, where a glut of cabbages has decimated the efforts of a whole year. Last year, a kilogram of cabbage had brought in 2 yuan.

Oversupply and dumping by speculators this year are the reasons farmers like Wang will be making a loss this year.

Last autumn, there was a shortage of cabbage in South Korea, which severely affected the annual kimchi making. South Korean traders turned to China for supply and this unexpected demand drove prices up. As a result, opportunistic speculators hoarded vast quantities of cabbage in cold storage and waited for prices to rise again this year.