BEIJING, Dec. 26 -- China's futures market will be developed actively, but with caution, while the planned introduction of index futures should not disturb the stock market's performance, said the China Securities Regulatory Commission's Chairman Shang Fulin yesterday during a forum.
"China will further diversify futures products and improve the risk control mechanism to create stable development in the futures market," Shang said during the 2007 China Finance Forum.
He also demanded adequate preparations for the launch of index futures, which has long been anticipated. It will allow investors to sell short on China's stock markets for the first time.
China has completed systematic and technical preparations for introducing index futures, Shang told Xinhua news agency in October.
However, the launch of index futures has been postponed several times due to worries over its influence on a stock market presently in a correction period, industry analysts said.
The index futures might be launched early next year, according to a research report published by the Shanghai Stock Exchange earlier this month.
Domestic stock markets should also prepare for more integration with international markets, Shang said.
"The ties between China's capital market and those elsewhere have become closer. China should improve the infrastructure of its capital markets to prepare for further integration," Shang said.
He said this includes the increase of direct capitalization and the establishment of a multi-layered market which offers diversified products.
China's double-digit economic growth in recent years and people's bulging interest in investments have fueled the expansion of the country's stock market.
By the end of November, the market value of the two mainland bourses in Shanghai and Shenzhen topped 29 trillion yuan (3.9 trillion U.S. dollars), with about 136 million people holding accounts.
In the first eleven months, the daily turnover on China's stock market hit 193.4 billion yuan. Accumulated turnover on the futures market reached 643 million yuan during the same period.
Beijing says Chinese insurers investing recklessly
BEIJING - CHINESE insurance companies are putting their businesses at risk by investing recklessly in the country's stock market, a senior industry regulator warned at a forum in Beijing on Tuesday.
The nation's stock market boom has caused some insurers to invest heavily in their own portfolios instead of concentrating on their underwriting business, said Li Kemu, vice-chairman of the China Insurance Regulatory Commission.
'In the last two years, insurance companies have made huge gains from their investment portfolios thanks to (China's) booming market,' he said. 'So much so that their portfolios have become the main source of their profits... making it quite difficult for them to make profits from the underwriting business.'
He acknowledged the huge temptation to invest money earned from premiums into the nation's bourses had pushed up share prices about 90 per cent this year and 130 per cent in 2006.
He said however that insurance firms were not fund managers and should focus on their own products.
In July insurers were told that they could double their investments in yuan-denominated stocks to 10 per cent, or nearly 200 billion yuan (S$39.5 billion), of their assets. -- AFP
BEIJING (AP) — China hopes to grow its middle class to more than half of its population by the end of the next decade, a Communist Party planner said Wednesday.
The goal is part of quadrupling China's per capita gross domestic product by 2020, said Zheng Xinli, vice minister of the Communist Party's Central Policy Research Office.
A bigger middle class will also challenge the government to provide greater social security and services and better education systems, Zheng said at a news conference.
"A growing middle-income population will ensure that more people will benefit from reform so that our reform will be endorsed and supported by more people," Zheng said.
Middle class is classified by the government as a family with a household income of between $8,000 and $27,000 a year, Zheng said.
Taking into account price changes, authorities project that by 2020 a little more than half of the country's families will be middle class, and 78 percent of those will be living in cities, he said.
"If this structure of income distribution is put in place, it will have a far-reaching impact on economic, social and political development in China," Zheng said.
Zheng did not give a percentage for the country's 1.3 billion people that are considered middle class. China's Academy of Social Sciences defines middle class as a household that earns 2.5 times China's average income. In 2006, it said that equaled about 4 percent to 5 percent of the total population, rising to 12 percent to 15 percent of the population in big cities.
China's economic development so far has come at excessive costs to its natural resources, Zheng said, adding that the economy was inefficient and polluting the environment.
The priority now is to move toward more sophisticated industries that use more science and technology and to foster entrepreneurs, he said.
The head of the government's top economic body was quoted Wednesday in the China Daily newspaper as saying the government had pressed provincial and local officials to curb investment and new energy-intensive projects in order to rein in growth and inflation.
Since opening up its economy in 1978 and moving toward a market economy, China has lifted about 400 million people out of poverty, according to the World Bank.
But this has led to wide income inequalities that the Communist Party is trying to address through its notion of a "harmonious society" that has a more even distribution of the benefits of recent decades of speedy economic growth.
The World Bank says there are 137 million Chinese who live in poverty, defined as those who consume less than US$1 (euro0.69) a day.
Zheng said continued development will eliminate "absolute poverty" by 2020, but he did not give details of this definition. The Chinese government's official poverty line is about 70 cents a day.
China to Remove Import Tax on Alumina and Refined Copper
By Ida Chen 26 Dec 2007 at 09:38 AM GMT-05:00
SHANGHAI (Interfax-China) -- China will stop levying import taxes on alumina and refined copper from 1 January to meet growing domestic demand for the metals, the Ministry of Finance (MoF) announced today.
China currently imposes a 2% import tax on refined copper, and a 3% import tax on alumina though Chilean refined copper is already exempt from tax due to a free trade agreement between Chile and China.
The MoF also announced that the government will maintain the current 10% export tax on refined lead next year, while exports of 0# refined zinc (>=99.995%) will continue to be exempt from tax. There had been market speculation that Beijing would impose a minimum 5% export tax on 0# refined zinc and increase export tax of refined lead to 15% next year.
"Theoretically, international copper prices will go up, driven by an increase in China's refined copper imports once the tax is removed," Li Yusheng, analyst with Beijing Antaike said.
"An ample supply of refined copper on the domestic market was maintained this year due to a jump in copper imports in the first five months. This was facilitated by international prices being lower than domestic prices, as well as low domestic stockpiles during the period," Li said.
Duan Shaofu, an official with the China Nonferrous Metals Industry Association (CNMIA) said the cancellation of the import tax would help alleviate the pressure of high import costs on downstream users.
"However, the current high copper stockpile reflects oversupply on the domestic copper market. More imports will further increase this," Duan said.
"If the price difference is not favourable enough for traders to make a profit, then we won't see a substantial increase in copper imports next year. After all, domestic copper supply has outpaced demand so far," Antaike's Li said.
China imported 103,410 tonnes of refined copper in November, up 55.8% from the same month last year. Imports for the first 11 months hit 1.38 million tonnes, surging 89%, according to statistics from the General Administration of Customs.
Analysts have previously said that the removal of the import tax may put pressure domestic alumina producers once imports increase and alumina demand dips after Chinese New Year.
Currently, imported alumina CIF prices at China's ports are between $460 and $470 a tonne.
China imported 373,969 tonnes of alumina in November, down 42.6% year-on-year, and imported a total of 4.8 million tonnes in the first 11 months of 2007, falling 24.6% on an annual basis.
LONG LAO GAO, Laos: The pineapple that grows here on the steep hills above the Mekong River is especially sweet, the red and orange chilies unusually spicy, and the spring onions and watercress retain the freshness of the mountain dew.
For years, getting this prized produce to market meant carrying a giant basket on a back-breaking, daylong trek down narrow mountain trails that cut through the jungle. That is now changing, thanks in large part to China.
Villagers ride their cheap Chinese motorcycles, which sell for as little as $440, down a badly rutted dirt road to the markets of Luang Prabang, the charming city of Buddhist temples along the Mekong that draws flocks of foreign tourists. The trip takes just one and half hours.
"No one had a motorcycle before," said Khamphao Janphasid, 43, a teacher in the local school whose extended family now has three of them. "The only motorcycles that used to be available were Japanese and poor people couldn't afford them."
Cheap Chinese products are flooding China's southern neighbors, and consumers in Myanmar, Laos, Vietnam and Cambodia are laying out the welcome mat.
The products are transforming the lives of some of the poorest people in Asia, whose worldly possessions only a few years ago typically consisted of not much more than a set or two of clothes, cooking utensils and a thatch-roofed house built by hand.
The concerns in the West about the safety of Chinese toys and pet food are largely moot for the people living in the remote villages here, although some residents complain about quality. As the first introduction to global capitalism, Chinese products are met with deep appreciation. "Life is better because prices are cheaper," Khamphao said.
Chinese television sets and satellite dishes connect villagers to the world, stereos fill their houses with music, and the Chinese motor scooters often serve as transport for entire families.
The motor scooters, which typically have small but adequate 110cc engines, literally save lives, says Saidoa Wu, the 43-year-old village headman of Long Lao Mai, a village nestled in a valley at the end of the dirt road, adjacent to Long Lao Gao. "Now when we have a sick person we can get to the hospital in time," Wu said.
The improvised bamboo stretchers that villagers here used as recently as a decade ago to carry gravely ill family members and neighbors down the mountain on foot are history. In a village of 150 families, Wu counts a total of 44 Chinese motorcycles, up from zero five years ago.
Chinese motorbikes fill the streets of Hanoi, Vientiane, Mandalay and other major cities in Indochina. Thirty-nine percent of the two million motorcycles sold annually in Vietnam are Chinese brands, according to Honda, which has a 34 percent market share.
Chinese exports to Vietnam, Myanmar and Laos amounted to $8.3 billion in the first eight months of the year, an increase of about 50 percent from the same period in 2006.
About seven years ago, residents here say, Chinese salesmen began arriving with suitcases filled with smuggled watches, tools and small radios, closing up and moving on when the police arrived. More recently, Chinese merchants, who speak only passable Lao, received permission to open permanent stalls in the towns and small cities across Indochina. In Laos, these are known as "talad jin," or Chinese markets.
Khamphao and his neighbors all have $100 Chinese-made television sets connected to Chinese-made satellite dishes and decoders, causing both joy and occasional tension among family members sitting on the bare concrete or dirt floors of their living rooms. "I like watching the news," Khamphao said. "My children love to watch movies."
A two-hour interview with Khamphao was interrupted twice: once when his buffalo in the adjoining field gave birth to a healthy calf and a second time when a movie channel was showing ' 'Lost in Translation," and the actor Bill Murray sang an off-key rendition of Brian Ferry's "More Than This."
Khamphao's children, whose daily lives are almost exclusively confined to the mountain village, have picked up the Thai language from television and sing along to commercials broadcast from neighboring Thailand.
The enthusiasm for Chinese goods here is tempered by one commonly heard complaint: maintenance problems. "The quality of the Japanese brands is much better," said Gu Silibapaan, a 31-year-old motorcycle mechanic in Luang Prabang.
People with money, he said, buy Honda, Yamaha and Suzuki motorcycles.
(People with lots of money buy cars.)
Gu claims he can tell a Japanese brand, manufactured in Thailand, just by listening to the engine.
"It sounds more firm and the engine noise is softer," he said. Some Thai-made Japanese motorcycles can go 10 years without an engine overhaul. Chinese bikes, he said, usually need major repairs within 3 to 4 years.
"I want a motorcycle from Thailand but I don't have the money," said Kon Panlachit, a police officer who brought his Jinlong 110cc motorcycle to Gu's shop for repairs on a recent weekend.
"When I ride it, it makes a noise - dap, dap dap," Kon complained. "It's the second time I've brought it here for this problem."
The cheapest Thai-made Honda goes for 55,000 baht, about $1,670 - four times the price of the cheapest Chinese bikes, which are sold under many brand names, including Yinxiang, Dashan, Yincin, Zongshen and Honshun.
The influx of Chinese motorcycles is keeping mechanics busy in Luang Prabang. A decade ago there were only two or three repair shops in the city, says Gu. Now he counts 20.
Gu does not worry about maintenance for his own motorcycle.
Dec. 26 (Bloomberg) -- Palm oil prices in Malaysia, the global benchmark, rose to a record today as global demand for vegetable oils for food and alternative fuel outstripped supply.
Oilseeds and vegetable oils are gaining from Chicago to Dalian on concern world inventories are dwindling as demand rises in China and India and governments subsidize the use of edible oils for fuel. Soybeans may lead gains among non-energy commodities next year, according to Goldman Sachs Group Inc.
Soybeans and soybean oil in China, the biggest consumer of the commodity, also soared to records as traders speculated demand may outpace supplies from government stockpile sales and imports. Soybeans in Chicago reached a 34-year peak and soybean oil the highest for at least 33 years on Dec. 24.
``The outlook for the grain, oilseed and vegetable oil markets remains very positive,'' Michael Coleman, Singapore- based managing director of Aisling Analytics Pte, which runs a $1 billion commodity hedge fund, said today by e-mail.
``To see significantly lower prices we'll need a combination of demand rationing and excellent harvests to allow a rebuilding of inventories,'' he said. ``That probably means significantly higher prices first.''
Palm oil for March delivery rose as much as 57 ringgit, or 1.9 percent, to 3,087 ringgit ($924) a ton on the Malaysia Derivatives Exchange today before closing at 3,080 ringgit a ton.
Supply Shortage
``Palm oil prices have gone up in spite of record-high stockpiles in Malaysia because the market is anticipating tight supply next year,'' Alvin Tai, analyst at OSK Research Bhd., said by phone from Kuala Lumpur today.
Palm oil inventories in Malaysia, the second-largest producer of the commodity, climbed 16 percent to a record in November as output reached its highest ever, the Malaysian Palm Oil Board said on Dec. 10.
Agricultural products have been among the best-performing commodities this year. Palm oil has gained 56 percent, soybeans 75 percent and soybean oil 62 percent. Goldman Sachs raised its 12-month forecast for soybeans by 61 percent to $14.50 a bushel from $9 a bushel in a Dec. 11 report.
Soybean oil futures traded on the Dalian Commodity Exchange have risen 40 percent this year. The most-actively traded contract for May delivery gained 200 yuan, or 2 percent, to close at 10,146 yuan ($1,382) a ton.
China, the biggest buyer of vegetable oils, imported 29 percent more of the commodities in the first 11 months of this year compared with a year earlier, customs data showed Dec. 11.
Imports of vegetable oil totaled 7.71 million metric tons from January to November, the Beijing-based customs office said. Palm oil imports gained 7.1 percent in the first 11 months while the country's imports of soybean oil and canola oil almost doubled and gained eight-fold respectively.
Indonesia and Malaysia produce 90 percent of the world's palm oil, the main substitute for soybean oil.
6 comments:
Diversity the key in China's futures market
BEIJING, Dec. 26 -- China's futures market will be developed actively, but with caution, while the planned introduction of index futures should not disturb the stock market's performance, said the China Securities Regulatory Commission's Chairman Shang Fulin yesterday during a forum.
"China will further diversify futures products and improve the risk control mechanism to create stable development in the futures market," Shang said during the 2007 China Finance Forum.
He also demanded adequate preparations for the launch of index futures, which has long been anticipated. It will allow investors to sell short on China's stock markets for the first time.
China has completed systematic and technical preparations for introducing index futures, Shang told Xinhua news agency in October.
However, the launch of index futures has been postponed several times due to worries over its influence on a stock market presently in a correction period, industry analysts said.
The index futures might be launched early next year, according to a research report published by the Shanghai Stock Exchange earlier this month.
Domestic stock markets should also prepare for more integration with international markets, Shang said.
"The ties between China's capital market and those elsewhere have become closer. China should improve the infrastructure of its capital markets to prepare for further integration," Shang said.
He said this includes the increase of direct capitalization and the establishment of a multi-layered market which offers diversified products.
China's double-digit economic growth in recent years and people's bulging interest in investments have fueled the expansion of the country's stock market.
By the end of November, the market value of the two mainland bourses in Shanghai and Shenzhen topped 29 trillion yuan (3.9 trillion U.S. dollars), with about 136 million people holding accounts.
In the first eleven months, the daily turnover on China's stock market hit 193.4 billion yuan. Accumulated turnover on the futures market reached 643 million yuan during the same period.
Beijing says Chinese insurers investing recklessly
BEIJING - CHINESE insurance companies are putting their businesses at risk by investing recklessly in the country's stock market, a senior industry regulator warned at a forum in Beijing on Tuesday.
The nation's stock market boom has caused some insurers to invest heavily in their own portfolios instead of concentrating on their underwriting business, said Li Kemu, vice-chairman of the China Insurance Regulatory Commission.
'In the last two years, insurance companies have made huge gains from their investment portfolios thanks to (China's) booming market,' he said. 'So much so that their portfolios have become the main source of their profits... making it quite difficult for them to make profits from the underwriting business.'
He acknowledged the huge temptation to invest money earned from premiums into the nation's bourses had pushed up share prices about 90 per cent this year and 130 per cent in 2006.
He said however that insurance firms were not fund managers and should focus on their own products.
In July insurers were told that they could double their investments in yuan-denominated stocks to 10 per cent, or nearly 200 billion yuan (S$39.5 billion), of their assets. -- AFP
China Aims to Grow Its Middle Class
BEIJING (AP) — China hopes to grow its middle class to more than half of its population by the end of the next decade, a Communist Party planner said Wednesday.
The goal is part of quadrupling China's per capita gross domestic product by 2020, said Zheng Xinli, vice minister of the Communist Party's Central Policy Research Office.
A bigger middle class will also challenge the government to provide greater social security and services and better education systems, Zheng said at a news conference.
"A growing middle-income population will ensure that more people will benefit from reform so that our reform will be endorsed and supported by more people," Zheng said.
Middle class is classified by the government as a family with a household income of between $8,000 and $27,000 a year, Zheng said.
Taking into account price changes, authorities project that by 2020 a little more than half of the country's families will be middle class, and 78 percent of those will be living in cities, he said.
"If this structure of income distribution is put in place, it will have a far-reaching impact on economic, social and political development in China," Zheng said.
Zheng did not give a percentage for the country's 1.3 billion people that are considered middle class. China's Academy of Social Sciences defines middle class as a household that earns 2.5 times China's average income. In 2006, it said that equaled about 4 percent to 5 percent of the total population, rising to 12 percent to 15 percent of the population in big cities.
China's economic development so far has come at excessive costs to its natural resources, Zheng said, adding that the economy was inefficient and polluting the environment.
The priority now is to move toward more sophisticated industries that use more science and technology and to foster entrepreneurs, he said.
The head of the government's top economic body was quoted Wednesday in the China Daily newspaper as saying the government had pressed provincial and local officials to curb investment and new energy-intensive projects in order to rein in growth and inflation.
Since opening up its economy in 1978 and moving toward a market economy, China has lifted about 400 million people out of poverty, according to the World Bank.
But this has led to wide income inequalities that the Communist Party is trying to address through its notion of a "harmonious society" that has a more even distribution of the benefits of recent decades of speedy economic growth.
The World Bank says there are 137 million Chinese who live in poverty, defined as those who consume less than US$1 (euro0.69) a day.
Zheng said continued development will eliminate "absolute poverty" by 2020, but he did not give details of this definition. The Chinese government's official poverty line is about 70 cents a day.
China to Remove Import Tax on Alumina and Refined Copper
By Ida Chen
26 Dec 2007 at 09:38 AM GMT-05:00
SHANGHAI (Interfax-China) -- China will stop levying import taxes on alumina and refined copper from 1 January to meet growing domestic demand for the metals, the Ministry of Finance (MoF) announced today.
China currently imposes a 2% import tax on refined copper, and a 3% import tax on alumina though Chilean refined copper is already exempt from tax due to a free trade agreement between Chile and China.
The MoF also announced that the government will maintain the current 10% export tax on refined lead next year, while exports of 0# refined zinc (>=99.995%) will continue to be exempt from tax. There had been market speculation that Beijing would impose a minimum 5% export tax on 0# refined zinc and increase export tax of refined lead to 15% next year.
"Theoretically, international copper prices will go up, driven by an increase in China's refined copper imports once the tax is removed," Li Yusheng, analyst with Beijing Antaike said.
"An ample supply of refined copper on the domestic market was maintained this year due to a jump in copper imports in the first five months. This was facilitated by international prices being lower than domestic prices, as well as low domestic stockpiles during the period," Li said.
Duan Shaofu, an official with the China Nonferrous Metals Industry Association (CNMIA) said the cancellation of the import tax would help alleviate the pressure of high import costs on downstream users.
"However, the current high copper stockpile reflects oversupply on the domestic copper market. More imports will further increase this," Duan said.
"If the price difference is not favourable enough for traders to make a profit, then we won't see a substantial increase in copper imports next year. After all, domestic copper supply has outpaced demand so far," Antaike's Li said.
China imported 103,410 tonnes of refined copper in November, up 55.8% from the same month last year. Imports for the first 11 months hit 1.38 million tonnes, surging 89%, according to statistics from the General Administration of Customs.
Analysts have previously said that the removal of the import tax may put pressure domestic alumina producers once imports increase and alumina demand dips after Chinese New Year.
Currently, imported alumina CIF prices at China's ports are between $460 and $470 a tonne.
China imported 373,969 tonnes of alumina in November, down 42.6% year-on-year, and imported a total of 4.8 million tonnes in the first 11 months of 2007, falling 24.6% on an annual basis.
Chinese goods transform life in Southeast Asia
December 26, 2007
By Thomas Fuller
LONG LAO GAO, Laos: The pineapple that grows here on the steep hills above the Mekong River is especially sweet, the red and orange chilies unusually spicy, and the spring onions and watercress retain the freshness of the mountain dew.
For years, getting this prized produce to market meant carrying a giant basket on a back-breaking, daylong trek down narrow mountain trails that cut through the jungle. That is now changing, thanks in large part to China.
Villagers ride their cheap Chinese motorcycles, which sell for as little as $440, down a badly rutted dirt road to the markets of Luang Prabang, the charming city of Buddhist temples along the Mekong that draws flocks of foreign tourists. The trip takes just one and half hours.
"No one had a motorcycle before," said Khamphao Janphasid, 43, a teacher in the local school whose extended family now has three of them. "The only motorcycles that used to be available were Japanese and poor people couldn't afford them."
Cheap Chinese products are flooding China's southern neighbors, and consumers in Myanmar, Laos, Vietnam and Cambodia are laying out the welcome mat.
The products are transforming the lives of some of the poorest people in Asia, whose worldly possessions only a few years ago typically consisted of not much more than a set or two of clothes, cooking utensils and a thatch-roofed house built by hand.
The concerns in the West about the safety of Chinese toys and pet food are largely moot for the people living in the remote villages here, although some residents complain about quality. As the first introduction to global capitalism, Chinese products are met with deep appreciation. "Life is better because prices are cheaper," Khamphao said.
Chinese television sets and satellite dishes connect villagers to the world, stereos fill their houses with music, and the Chinese motor scooters often serve as transport for entire families.
The motor scooters, which typically have small but adequate 110cc engines, literally save lives, says Saidoa Wu, the 43-year-old village headman of Long Lao Mai, a village nestled in a valley at the end of the dirt road, adjacent to Long Lao Gao. "Now when we have a sick person we can get to the hospital in time," Wu said.
The improvised bamboo stretchers that villagers here used as recently as a decade ago to carry gravely ill family members and neighbors down the mountain on foot are history. In a village of 150 families, Wu counts a total of 44 Chinese motorcycles, up from zero five years ago.
Chinese motorbikes fill the streets of Hanoi, Vientiane, Mandalay and other major cities in Indochina. Thirty-nine percent of the two million motorcycles sold annually in Vietnam are Chinese brands, according to Honda, which has a 34 percent market share.
Chinese exports to Vietnam, Myanmar and Laos amounted to $8.3 billion in the first eight months of the year, an increase of about 50 percent from the same period in 2006.
About seven years ago, residents here say, Chinese salesmen began arriving with suitcases filled with smuggled watches, tools and small radios, closing up and moving on when the police arrived. More recently, Chinese merchants, who speak only passable Lao, received permission to open permanent stalls in the towns and small cities across Indochina. In Laos, these are known as "talad jin," or Chinese markets.
Khamphao and his neighbors all have $100 Chinese-made television sets connected to Chinese-made satellite dishes and decoders, causing both joy and occasional tension among family members sitting on the bare concrete or dirt floors of their living rooms. "I like watching the news," Khamphao said. "My children love to watch movies."
A two-hour interview with Khamphao was interrupted twice: once when his buffalo in the adjoining field gave birth to a healthy calf and a second time when a movie channel was showing ' 'Lost in Translation," and the actor Bill Murray sang an off-key rendition of Brian Ferry's "More Than This."
Khamphao's children, whose daily lives are almost exclusively confined to the mountain village, have picked up the Thai language from television and sing along to commercials broadcast from neighboring Thailand.
The enthusiasm for Chinese goods here is tempered by one commonly heard complaint: maintenance problems. "The quality of the Japanese brands is much better," said Gu Silibapaan, a 31-year-old motorcycle mechanic in Luang Prabang.
People with money, he said, buy Honda, Yamaha and Suzuki motorcycles.
(People with lots of money buy cars.)
Gu claims he can tell a Japanese brand, manufactured in Thailand, just by listening to the engine.
"It sounds more firm and the engine noise is softer," he said. Some Thai-made Japanese motorcycles can go 10 years without an engine overhaul. Chinese bikes, he said, usually need major repairs within 3 to 4 years.
"I want a motorcycle from Thailand but I don't have the money," said Kon Panlachit, a police officer who brought his Jinlong 110cc motorcycle to Gu's shop for repairs on a recent weekend.
"When I ride it, it makes a noise - dap, dap dap," Kon complained. "It's the second time I've brought it here for this problem."
The cheapest Thai-made Honda goes for 55,000 baht, about $1,670 - four times the price of the cheapest Chinese bikes, which are sold under many brand names, including Yinxiang, Dashan, Yincin, Zongshen and Honshun.
The influx of Chinese motorcycles is keeping mechanics busy in Luang Prabang. A decade ago there were only two or three repair shops in the city, says Gu. Now he counts 20.
Gu does not worry about maintenance for his own motorcycle.
"I have a Honda," the mechanic said.
Dec. 26 (Bloomberg) -- Palm oil prices in Malaysia, the global benchmark, rose to a record today as global demand for vegetable oils for food and alternative fuel outstripped supply.
Oilseeds and vegetable oils are gaining from Chicago to Dalian on concern world inventories are dwindling as demand rises in China and India and governments subsidize the use of edible oils for fuel. Soybeans may lead gains among non-energy commodities next year, according to Goldman Sachs Group Inc.
Soybeans and soybean oil in China, the biggest consumer of the commodity, also soared to records as traders speculated demand may outpace supplies from government stockpile sales and imports. Soybeans in Chicago reached a 34-year peak and soybean oil the highest for at least 33 years on Dec. 24.
``The outlook for the grain, oilseed and vegetable oil markets remains very positive,'' Michael Coleman, Singapore- based managing director of Aisling Analytics Pte, which runs a $1 billion commodity hedge fund, said today by e-mail.
``To see significantly lower prices we'll need a combination of demand rationing and excellent harvests to allow a rebuilding of inventories,'' he said. ``That probably means significantly higher prices first.''
Palm oil for March delivery rose as much as 57 ringgit, or 1.9 percent, to 3,087 ringgit ($924) a ton on the Malaysia Derivatives Exchange today before closing at 3,080 ringgit a ton.
Supply Shortage
``Palm oil prices have gone up in spite of record-high stockpiles in Malaysia because the market is anticipating tight supply next year,'' Alvin Tai, analyst at OSK Research Bhd., said by phone from Kuala Lumpur today.
Palm oil inventories in Malaysia, the second-largest producer of the commodity, climbed 16 percent to a record in November as output reached its highest ever, the Malaysian Palm Oil Board said on Dec. 10.
Agricultural products have been among the best-performing commodities this year. Palm oil has gained 56 percent, soybeans 75 percent and soybean oil 62 percent. Goldman Sachs raised its 12-month forecast for soybeans by 61 percent to $14.50 a bushel from $9 a bushel in a Dec. 11 report.
Soybean oil futures traded on the Dalian Commodity Exchange have risen 40 percent this year. The most-actively traded contract for May delivery gained 200 yuan, or 2 percent, to close at 10,146 yuan ($1,382) a ton.
China, the biggest buyer of vegetable oils, imported 29 percent more of the commodities in the first 11 months of this year compared with a year earlier, customs data showed Dec. 11.
Imports of vegetable oil totaled 7.71 million metric tons from January to November, the Beijing-based customs office said. Palm oil imports gained 7.1 percent in the first 11 months while the country's imports of soybean oil and canola oil almost doubled and gained eight-fold respectively.
Indonesia and Malaysia produce 90 percent of the world's palm oil, the main substitute for soybean oil.
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