La Nina, scarce cooking oil

Cooking oil, an essential ingredient in world cooking, seems to near scarcity with the La Nina weather effect, where the temperatures drop or gets cooled. Many oil refineries around the world have shown drop in production, due to drought and heavy rains. Crops which are raw materials for oil like soya beans, sunflower etc have also suffered with weather changing drastically effecting production.


As demand for oil rises, China, one of the important importers may have to pay huge amount to acquire the seeds.  According to Dorab Mistry, director of Godrej International Ltd, "The market is focused on Chinese monthly imports of beans. If the Chinese government releases State Reserves and they skip one month’s imports, it will have a bearish impact on prices in the short term.”


Low demand for sunflower oil and rapeseed oil also may raise demand and price for soya bean oil. I reckon cooking oil prices will eventually rise, cause: environmental changes. 

China and India, Internet centres

China is yet again trying to woo global internet lovers to invest in more techonology, as it launches its very own version of You Tube, claimed to be better and innovative than the former, called Youku.com. The company, Youku.com Inc which came up with this virtual product, predict the world is shifting and foreign companies will invest in China's innovation. According to a technology consultant, Duncan Clark, chairman of BDA China in Beijing, : "The Internet’s center of gravity is shifting toward China. China has almost double the number of U.S. Internet subscribers. That concentration matters.”

China with its strict censorship rules, has kept away gaints like Google, Skype,Msn and Yahoo, giving chinese local companies the opportunity to come up with their own products like QQ.

Now India is not far behind, with its own Ibibo.com and many more such sites catering to Indian internet users. There are many companies in India who are also developing applications like Android and Iphone for Foreign companies, which is a plus point when the US is still struggling with recession blues. China and India are where Japan was some years back, a bloom in technology. Way to go !!!

Short Selling in Hong Kong

To start with let me educate my readers about 'Short Selling'. Short selling is a way of selling shares which the owner doesn't own still. The broker on behalf of the owner will buy or sell shares, and then it is upto the owner to keep it or close the trade, also called 'Covering'. The short selling is expensive for customers since they are charged interest on the Margin Balance accounts if they decide to hold any shares for long. So basically the customer has borrowed the shares from the broker and sold it and later you must pay back the broker any dividends or rights declared when holding the share loan.

Now coming to the news about Hong Kong topping the list of Short Sellers in Asia. According to a study by Data Explorers, a financing company, Hong Kong has taken over Japan's equities in short selling after banks, pensions and mutual funds reaped profits from loaning out Hong Kong shares. Investors are keen in investing in Chinese companies, showing a fading interest in Japan. The Singapore head of Asian regional strategy from the Royal Bank of Scotland Group Plc, Emil Wolter, thinks, :"As the Hong Kong market grows, there’s an increasing amount of activity that is not necessarily directional, like arbitrage, program trading and more complex trading strategies that are being put to work. Japan has been a market that’s been fading away for a long time and people are frustrated with it.”

It is good for Chinese companies and the economy as a whole for getting undivided attention from investors. Chinese companies are making moey for them and so investors are sticking to them.Lets hope short selling picks up like this India too.




(source: bloomberg.com & investopedia.com).