Three people were killed and 31 injured at the weekend in a stampede for low-priced cooking oil

A 20 per cent discount on five-litre bottles of rapeseed oil at a Carrefour supermarket had people lining up from 4am on Saturday. A stampede ensued four hours later when the doors were opened to the shopping mall where the French hypermarket is located.

Wholesale vegetable oil prices in China have jumped more than 40 per cent in the past year and increases accelerated in October, with weekly price rises of about 3 per cent at supermarkets in Beijing.

Prices of other foodstuffs such as milk, pork and eggs are also rocketing, contributing to annual headline inflation of more than 6 per cent – the highest level for more than a decade.

Hoarding is, apparently, also part of the problem:

Adding to concerns were reports over the weekend of renewed fuel shortages across the eastern seaboard, a week after the government raised tightly controlled pump prices by 10 per cent for the first time in 17 months.

There were also reports that some retail outlets have started hoarding supplies, particularly of diesel, in the expectation the government will raise prices again as global crude oil prices flirt with record $100-a-barrel levels.

This is a problem that probably arises more with government regulation – like betting on interest rates increases/decreases. When those increases are discrete events, they become more clearly signalled – and significantly more important. This, too, is an Austrian school problem: the more the government intervenes in the market, the more it has to re-intervene in the market, until it ends up controlling everything (and most things badly).

Hoarding, however, is particularly problematic. When we expect a future price increase, demand shifts outwards. Think of the demand curve being the market demand by today’s demanders. When we expect a price increase tomorrow, tomorrow’s demanders will enter today’s market instead – pushing out the demand curve, driving up the price, forcing a run on supplies and contribution to a/the future shortage. A run on banks serves the same daft function.

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