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.

Cash Grab Gets Closer

Months after waiting for the government to get its act together, now senior citizens can finally apply for their HK$6,000 ($769.82) handout.

Those born in 1946 and before are eligible to apply now, though there is a HK$200 bonus if you wait another few months, but the elderly are eagerly filling out forms now because they don't know how much longer they're going to be around.

When people are asked by the media what they're going to do with their cash handout, some say they'll travel, others buy clothes or pay their mortgage or even do the good deed of giving it to charity.

Meanwhile CNNGo has figured out some other creative ways to blow the cash:

1. 66 scoops of white truffle ice cream from Ice-cream Gallery, one of Hong Kong's best cold treats.

2. 200 pints of draught beer from our favorite bar by the Central Pier, The Beer Bay.

3. 461 plates of scrambled eggs from the perennially popular Australia Dairy Company.

4. 3,076 cups of food for victims of famine in the Horn of Africa through the World Food Program.

5. Stay in King's Cube for 60 nights.

6. Kick back in the Peninsula Suite for about 2 hours -- it's one of the world's most expensive.

7. Own a few square centimeters of a luxury apartment at The Masterpiece.

8. Book the Champagne room at hot "digital karaoke" joint Red MR.

9. Be the first to buy the iPhone 5 when it finally comes out, plus about 120 apps.

10. Get double eyelid surgery for one eye at hkfacelift.com

Picture of the Day: Apple is Coming

The excitement is building with Apple's highly anticipated store opening

Over a week ago I took a picture of where Apple's 100th store will be and yesterday I saw the black wrapping was taken off revealing this sign.

At the bottom it says: "Apple Store, ifc mall. The new center of Central."

Fans will definitely be flocking in a few weeks...

China's Major Misstep in Libya

China was quick on the defensive today when Canadian newspaper The Globe and Mail found documents that China was offering weapons and ammunition worth at least $200 million to Colonel Moammar Gadhafi in late July which also violated United Nations sanctions.

Foreign Ministry spokeswoman Jiang Yu sought to deflect attention Monday by saying that while Chinese companies had approached Gadhafi's side, she stressed no transactions were ever made.

However Omar Hariri, chief of the Libyan transitional council's military committee saw the documents and believes they explain brand-new weapons the rebels encountered in the field.

"I'm almost certain that these guns arrived and were used against our people," he said.

The Globe and Mail reporter found the memo in the trash in a neighbourhood known as Bab Akkarah, where several of Gadhafi's most loyal supporters have ostentatious homes.

The memo documents a trip by Gadhafi's security officials made from Tripoli to Beijing on July 16. In the Chinese capital they met officials from three state-owned weapons manufacturers: China North Industries Corp (Norinco), the China National Precision Machinery Import & Export Corp (CPMIC), and China XinXing Import & Export Corp.

The companies not only offered their entire stockpile of weapons and ammunition, but added if they needed more, they would manufacture them. They also added that the weapons should be transferred through a third country to avoid detection.

If that's not proof enough that China was trying to back Gadhafi, I don't know what is.

And what about China's constant refrain of not interfering in the domestic affairs of other countries?

This time it definitely backed the wrong side and the transitional government will bear this in mind when it eventually comes to power.

China likes dealing with autocratic leaders like former Egyptian President Hosni Mubarak and Gadhafi because they have much in common. But Beijing has put its bets on the wrong horses.

As the Arab Spring continues to sustain and spread through the Middle East, Beijing will have to assess things much more carefully with fewer despots on its side.