Black Markets: Applying Aribitrage Lessons From Rice to Steel

Spend Matters' affiliate blog, Metal Miner, recently had a fascinating post penned by my lovely wife suggesting that there is plenty that black markets in rice can tell us about steel. According to Lisa Reisman's analysis, "The Chinese government would rather subsidize rural farmers (to keep them happy) than allow imports (of rice)." But this, of course, still does not stop local farmers from selling their crops at significantly higher prices to those who can get it out of the country. Like the steel markets, "As long as countries like the US and China continue to subsidize [steel] ... relatively equally, we'll avoid black markets. Now arbitrage opportunities, well that is an entirely different matter." Looking for more details on how black markets -- and arbitrage opportunities -- emerge? Check out the full story by clicking the above link.

- Jason Busch

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.