Due to price control by the government and international price hike of soybean, major soybean oil producers have stopped production for this low end oil due to profit plummet. As I have said days ago, international commodity price rise, particularly food, has become a national security issue for China. Systemically, multinational companies have controlled global soybean production. They have a global positioning program in which soy bean production is located in Americas and oil production in China, taking advantages of the low cost of both land and labor. The consequences are: Chinese peasants stopped providing soy bean, because their cost was too high compare to the western hemisphere; soy bean price is determine in the commodity exchanges where speculator may easily hijack the valuation process; Chinese local producers are caught in between of a global soy bean price and a domestic administered soybean oil price. One of the things that triggered the speculation was the snow storm in southern China which dramatically reduced the yield of rapeseed. In the future, if the soy bean price went up high enough to yield a profitable margin, Chinese peasants could start planting it again. Also, at a certain point, the government will have to let go of the price cap. Before that happens, the only thing government can do is to subsidies the soy bean importation so that oil factories can run again.
In a word, no end in sight for the inflation.
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