November 29th, 2012 at 7:35 am
Earlier this Fall, Kara Newman talked with Zester Daily about her new book The Secret Financial Life of Food: From Commodities Markets to Supermarkets.
In the interview Newman explains commodities markets and futures trading and how it affects the price of food on your plate. She also considers the recent scare over bacon shortage due to the end of trading in pork belly futures. Looking at other recent developments, she examines the ways in which farmer’s markets and the trend to eating locally allows people to “opt out” of the pricing set by commodities markets.
Newman is also a well-known writer on alcohol and spirits and she is also asked about the growing whiskey futures market and the role of Chinese consumers in affecting the French wine industry:
Although coffee beans have a long history of formal trade in the U.S., potables such as wine and whiskey are still in their trading infancy. Bordeaux futures are nothing new, but wine funds certainly are, and we’re starting to hear rumblings about the nascent “whiskey-investment” industry, although it doesn’t seem to have developed much traction yet.
Growing interest in both products from newly affluent drinkers in China and elsewhere surely have created a market that’s ripe for trading. Particularly where wine is concerned, it has all the elements of uncertain supply and fluctuating demand. That includes the investment manager’s observation that many Chinese drinkers are purchasing wine to consume now, rather than to age — a trend that has the potential to impact supply down the road for older vintages, which could lead to higher prices — if what’s in the bottle is good, of course! Regardless of what’s being traded or how, though, it still comes down to basic supply and demand.