China says commodity shortage and demand are pushing up supply prices

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A day after India expressed concern over the rising prices of essential medical supplies from China, the Chinese Foreign Ministry in Beijing said growing demand from India and a shortage of raw materials were drive up costs.

The Chinese government said Friday that companies there had received orders for more than 70,000 oxygen concentrators from Indian companies. Chinese media said companies were adding production lines and hiring workers to meet the surge in orders.

Indian Consul General in Hong Kong Priyanka Chauhan on Thursday raised concerns about the price hike to the South China Morning Post. “At this point, we expect the supply chain to remain open and product prices to remain stable,” she said. “Even if there is a little pressure on supply and demand, there has to be some stability and predictability in product prices. And there has to be a feeling of support and effort at the government level. I don’t have any information on the influence that the Chinese government can have in this matter, but if it can, then it would be welcome.

Ms Chauhan added that India was asking China “to facilitate freight flights so that supplies can be delivered.” State-owned Sichuan Airlines suspended cargo flights to India for 15 days last month. “Unreasonable controls should be avoided and transport links should be maintained,” she said, adding that a phone call between the two foreign ministers helped secure some approvals but the flights were not not yet returned to the same frequency.

Chinese Foreign Ministry spokeswoman Hua Chunying told reporters that China exported to India in April “more than 26,000 ventilators and oxygen concentrators, more than 15,000 patient monitors and nearly of 3,800 tons of drugs and medicines. ” “Affected Chinese companies have received orders from India for more than 70,000 oxygen concentrators and are working tirelessly to deliver them as quickly as possible. In addition, India has a high demand for raw materials for vaccines, including auxiliary materials. Since the beginning of this year, the Chinese companies concerned have supplied more than 10 tons of these materials to India and more than 20 tons are expected to be delivered soon, ”Ms. Hua said.

“We agree with the remarks of the Indian Consul General in Hong Kong that supply chains must remain open and stable,” she added. “We hope that all parties can take concrete steps to ensure that global industrial and supply chains are stable and open. No one should intentionally disrupt and undermine the openness and stability of global supply chains outside of the political agenda. ”

The spokesperson said the issue of prices was “a market factor determined by supply and demand”. “We asked the companies concerned about the price increase. Taking oxygen concentrators as an example, one reason is that the increase in demand has affected global supply chains. Additionally, due to the shortage of raw materials to be imported from Europe, production capacity is affected. In addition, Indian buyers usually make the same demand through various channels and sometimes buy products through different channels. This has inflated excessively demand, which to some extent affected the market order and pushed up prices. In early 2020, when China was at the most difficult response time, we have the same problems. Therefore, we hope that all the parties can work together to ensure that supply chains remain open and stable. “

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