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Department for Education
The foodprices
So no fancy graphs this day. Just a quick update on the food markets. Let’s start with the wages. A long time ago, 6/01/2011, the average wage was 11,7GBP. At the moment almost no skill is being pay more than 10. The current average is 8,8 GBP.
Why is this? The main reason is a fall in prices because of competition. Lower wages means lower costs. In the raw material sector this is noticed the best. The grain market, still one of the biggest employers of this country is selling at 0,07 GBP/Unit. When we first started this was around 0,10 GBP. At this time, when the grain companies are offering the current wages, they can still make a profit out of this. The cost price for producing grain has fallen down to almost 0,05 gbp/unit. This means we can even expect lower grain prices in the near future.
Grain is used in food, so indeed food prices are also going down. Most noticeable in the Q1 market, where we have a huge competition. At the current wages/grain prices every single Q1 company is making a loss. Yes indeed, this is a fact. You can recalculate if you want, but it’s not looking good. Q2 is also going down the last weeks. Again I don’t believe anyone is making a profit with the current wages. In Q3 in contrast, they can make a lot of profit at the current moment. This is mostly because the prices are very high in Q3. But more about this later on.
In Q4 they make profit and also in Q5 they are doing good. So the old idea of V1 (how higher the Q how bigger the profits) is still alive and kicking. This is mostly because everyone can start a Q1 company, but almost nobody a Q5. But I would like to advise people to save gold until they can start in Q3.
As always for food you need to look at the GBP/wellness ratio. Its very high above Q3. Lets have a look:
Wellness/GBP
Q1 : 0.265
Q2 : 0.2725
Q3 : 0.38166666666667
Q4 : 0.35375
Q5 : 0.396
av : 0.33378333333333
So yes buying Q1 food is a good thing, buying Q5 is not a good idea. The main reason is because Q1 and 2 is selling with a loss. So I hope the markets will work this out, raising the lower Q a bit, and lowering the higher Q a lot. But this is something behind my control. But I advise company owners of Q1 and Q2 to work together, not to get more profit but to get profit. Or to upgrade as soon as possible.
I also think grain price can go down a little bit, so this mean the food prices can go a lot lower at the moment. Which is a good thing.
Purchasing power
So about the purchasing power of the people. With a average wage of 8,8 you can buy around 25 wellness a day. A normal person only need 5 wellness a day so this means nobody is starving to death. But the lower wages, the lower prices means lower income for the BoE and Thatcher don’t like this. But I have good news, because of the change in exchange rates, the lower wages and the lower raw materials(oil has crashed until 0.04) it’s very easy to export.
A lot of people think they have found the formula to create gold, they buy Iron companies and grain companies and work for them. Yeah fine with m. But I will give you an example. You have bought yourself a personal Q3 food company. You are skill 10 and you use boosters. You can produce around 72 units of Q3 food. This means around 576 wellness, a bit more you can consume daily. Now wait a lot more. You think I sell them to the eUK! Yes you should do this! Good because technicaly you only need to buy the raw materials(1700 units of grain) it will only cost you 1,68 unit Q4 food. This means a profit of around 1 gbp/unit. Or some 70 gbp a day. This is not a bad thing you think!
It can be even better, if you produce your own grain! With a Q1 grain firm you can create 630 units of grain, so if you have two firms indeed you will produce free grain and free Q4 food. Ow free? You need 20 gold for the grain, 190 for the Q4 company and another 20 gold for the grain. This is a lot of gold, I don’t know but that many gold I don’t have. And what do you get? Well you can earn around 175 gbp a day if all the Q4 gets sold. About 4,3 gold a day. You earn it back after 50 days. I will not say this is a bad investment, not at all. But I think it will have some nasty consequences. First, more supply on the Q4 food market. Second less demand on the grain market. And less job offers. So logically this well lead to lower food prices, lower grain prices and so on. This means you’re profit is going down.
You want another way of making money?
A good alternative!
Let’s start with the same budget of gold. Create a Q4 food company but not two grain companies, just buy an export license to let’s say Macedonia. You work at this company and you buy the grain from the market. It cost’s you around 1,68 GBP to create food. Or around 0,042 gold. With the current import tax and food price you get around 0,08 gold/Q4 food. This means a profit of 0,04 gold/Q4 food. Because of the war there is a huge demand for food, so the change you can sell everything you produce is higher than when selling on the eUK market. You earn 5,75 gold every day when you sell everything you produce. More than when selling to the eUk. A lot more. And it has cost you less(20 gold) and you are helping the eUK grain market. Ow and the good thing is, grain prices are to be expect to go down. And you can even think about employing workers because of the huge demand. Think about it.
Master Hofkens,
MoT
Comments
Great article! This is great way to finally understand economy of erepublik in which I am so interested! 🙂
I sell my grain at 0.07 i hope that helps
It only helps if you can sell it with a profit 🙂
But the main problem for food is the low demand at the moment
Are you really advising people to buy export licenses as a more profitable alternative to getting a company that you can work in for free?
good article
@Rory: In the longer term this is the only option. If everyone start to work only for himself there will be no demand and no market and in the near future no eUK.
As a MoT I'm not here for the bussines owners, nor for the riche people and not even for the poor but for the state.
So the government is deliberately giving out advice to company owners that will lose them money in order to benefit the state? Isn't that communist propaganda? 🙂
Calling me a communist? I'm UKRP...Every good capitalist will tell you this: you need demand to survive. If you don't offer jobs, if you don't buy locally there will be no demand and no profits...That's very easy. I have offer them a alternative with even more profits so why not take it...