Thursday, 8 September 2011

Prices Over the Moon

A traditional mooncake handmade at the Sheraton Hong Kong

Mooncakes are a must for Mid-Autumn Festival which falls next Monday, but the tradition of making them may fall by the wayside soon thanks to inflation.

This year many local bakeries that make the mooncake complete with lotus seed paste and duck yolks are finding the ingredients more expensive and as they can't price them too high, the margins are getting much thinner.

"This year is particularly more difficult even though sales have been brisk," said Tse Ching-yuen, owner of the famous Tai Tung Bakery in Yuen Long. The bakery was set up by his father in 1943. Tse, 81, explains everything from the tin boxes to the ingredients and rent have all gone up.

The prices of lotus seed imported from the mainland have soared to HK$88,000 a tonne in June from HK$60,000 in March. Prices have since fallen to HK$42,000, but far above the HK$28,000 last year.

The wooden paddle used for making traditional mooncakes
Tse is angry that speculators have driven up prices. "There were rumours that a female speculator in Wenzhou splurged 1.3 billion yuan buying up lotus seeds in June which raised the price to HK$88,000," he said. "I have never seen lotus seeds so expensive before."

Sugar prices also went up 80 percent higher, peanut oil from South Africa rose 12 percent, American flour up 17 percent and walnuts from the mainland up 211 percent. On top of that with the minimum wage going up, wages rose 20 percent to around HK$70 an hour. These days more bakeries are using machines to make mooncakes than manual labour.

As a result a mooncake costs 25 percent more than last year, but only 3.4 percent more to buy.

"The retail price can't be raised too much or customers may vote with their feet," he said. "Producing mooncakes no longer makes you prosperous, but it means a lot in terms of continuing Chinese tradition and my family's heritage."

Tse's son Peter Tse Hing-chi observes many mainland customers order as many as 50 boxes of mooncakes worth HK$10,000. He said one businessman from Hangzhou ordered 150 boxes worth HK$31,500 as corporate gifts.
Freshly-baked custard mooncakes at the Sheraton Hong Kong

"We have had more mainland shoppers in the past few years, and their orders are getting bigger and with more specific requests," he said. "One thing they share in common is they don't care much about prices."

It's frightening to see the cost of ingredients, particularly lotus seeds and walnuts go up over 200 percent. However it's good to know mainlanders are keeping these bakeries in business. After all, these customers are willing to pay for the real thing.

1 comment:

  1. as with everything prices are going up and up, moon cakes are not alone. our own people from the mainland would save the day. they got nothing but cash.