FAMILIES in Hong Kong and Macau are facing infant milk powder shortages after Chinese mainland customers and smugglers bought up huge quantities of formula over the spring festival of Chinese New Year.
Consumer confidence in domestic Chinese milk powder has been low since the melamine contamination scandal in 2008.
While the government has made some highly public steps to punish those involved in the production of poisoned formula, which led to several deaths and thousands of sick infants, there are still lingering doubts about the safety of domestic milk powder.
By some estimates, more than half the babies in China are given imported milk powder. Chinanews.com said mainland tourists on shopping binges bought up almost all the stock in Macau and Hong Kong over the Chinese New Year break.
The shopping binge has led to many popular imported brands being sold out and prices for what remains are up 10 per cent, local media reported.
Thousands of people willing to smuggle milk powder are crossing the border from southern China into Hong Kong and Macau to bring back the dairy powder.
Some people in Hong Kong and Macau are calling for taxes on milk powder to discourage mainland Chinese taking advantage of the strong renminbi currency to buy up their stocks.
Meanwhile, China’s chief food-producing areas are still reeling from an extreme shortage of precipitation this winter, which has prompted the United Nations food agency to warn of pressure on wheat prices in the world’s largest wheat growing country.
While the traditional image of China is of a rice-eating nation, most people north of the Yangtze River eat wheat-based food.
The drought is adding to concerns about global food prices, which surged to record highs in January, and are expected to continue to rise in the months ahead.
A strong rise in food prices in 2007 and 2008 led to protests in many countries, and recent unrest in Tunisia has been linked to food price surges.
Though it snowed in northern China this week, drought in northern China remains a long-term problem. Chen Lei, deputy director at the State Flood Control and Drought Relief Headquarters, said China “faces an arduous task of fighting drought ... enhanced efforts of irrigation, recent rain and snowfalls helped prevent the drought spreading in some winter-wheat growing areas.”
Hundreds of millions of Chinese rely on farming to make a living and authorities have struggled for years with the problem of water shortages. Good harvests are crucial to keeping meat, grains and vegetables affordable for the vast majority of lower-class Chinese who spend one-third or more of their income on food.