Saturday, January 16, 2016

Economy: Cherries In Winter - How Cheap Oil Fosters Globalization

(Drivebycuriosity) -Today I got fresh cherries. In New York`s Chinatown they sell 2 pounds for $5. The fruit is as cheap as in the summer season. Apparently the cherries come from the Southern Hemisphere - places like Chile or Australia and New Zealand. In the past you had to pay more than twice in New York or Europe if you wanted to get fresh cherries in January. What has changed?

In the past cherries from the South were expensive because it had cost a lot to transport them to the North. But this changed. In the recent 18 months the price of oil collapsed about 75%. So, the costs of transporting things from A to B fell dramatically.

Not just the cherry lovers benefit. Their planters can sell their products easily worldwide and gain much more demand for their products. This advantage is not restricted to cherries of course, any physical good can now be transported worldwide for cheap - thanks to the oil price collapse.  So, the sharp drop of transport costs fosters globalization.  Delicious, isn't it?

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