Discussion during the first few days back in the New Year has been mostly about the Major Snow Event here in China!  Snow piles (small and dirty but significant from shoveling) still exist here in Shanghai today!

A headline in the China Daily reads:

"Party officials to be gauged on performances in snow relief and restoration work"

The snow event shows up in the CPI numbers.  Many pigs died and I am told that also has to do with why the pork prices were so inflated.  Travel to and from Yunnan was extremely difficult, if not impossible.

A new teacher traveled from Hong Kong to Shanghai for 50 hours by train.  She was not allowed off the train as customs was to be in Shanghai!!  Luckily it was not a local train but an express which had food supplies, etc.

The small ramen noodle type packages were extremely expensive (here in China they are very popular and often much larger bowls so that all one needs to do is add boiling water).  That is until the government placed price controls on the sales on the train!  Which leads us to discussion of wheat consumption.

From Bloomberg news: "Wheat has more than doubled since May, reaching a record $11.53 a bushel on Feb. 11 and driving up costs for everything from Eggo waffles and Italian pasta to Pakistani flatbreads and Japanese pastry. This month the world's biggest securities firm scrapped projections for a price drop within 90 days, and the U.S., the biggest exporter, said it would ship 23 percent more than originally estimated before summer."

China is a major consumer of wheat! (However, Japan is the number one importer.)

Many people think of China as a rice consumer, however I see as many people HERE IN SHANGHAI eating noodles as I do rice (maybe even more).  There are noodle shops ALL over the city.

Goldman Sachs Group Inc. has raised their three-month price target to $13.50 (according to Bloomberg News).
Again from the same article:

"Demand Outpaces Crops

Global wheat production for the marketing year through May will probably reach 603 million tons as consumption rises to 619 million tons, according to the USDA. Demand in India, the most- populous nation after China, is up 16 percent since 2001.

The U.S. is the exporter of last resort as Russia, the third-biggest exporter, and Argentina, the fourth-largest, keep more for themselves. So far this marketing year, U.S. shipments have doubled to Egypt, Iraq and Indonesia, and tripled to the European Union, USDA data show. Pakistan, which imported nothing from the U.S. last year, purchased 150,000 tons."

Notice how this will impact our exports, especially if the price rises as anticipated!  Furthermore, the U.S. will be one of the countries increasing supply due to high prices.