- Wheat stocks for the five largest global exporters are forecast to fall to a 34-year low of 25m tonnes.
- Strong US weekly export sales of 1.7m tonnes pushed corn prices up with CBOT December corn 7 cents higher at $3.82.
- Soyabeans soared through the $10 a bushel level with the CBOT November contract up 25 cents to $10.15¾ a bushel after strong weekly US export sales of 745,600 tonnes.
More oil price, more attractive corn and other farm oil products become, so you move more agricultural production to make agri-oil, which leaves less space and money for normal foodgrain production, which reduces the supply, and demand remaining the "normal" which in turn increase the prices.
This rise in food prices in turn is starting to impact inflation all over the world because food prices are generally a very large component of the inflation measuring basket. I quote
Germany's annual inflation rate leapt to 2.7 per cent in September, up from 2 per cent in August on a harmonised European basis according to the country's statistical office. An acceleration had been expected because of statistical effects and energy costs, but the scale of food price rises surprised analysts. North Rhine Westphalia reported a 37.5 per cent rise in the
price of -butter in the year to September, for instance.
I would very strongly suggest that the supranational bodies take note of this, specially the EU, UN, FAO, etc. And that too urgently. Stop faffing around with Iran, leave them alone and get to grips with something that is far more urgent. Specially read some of the stories at the FAO site, they are horribly scary!
UPDATE: China is also aiming at inflation which is rising mainly because of food prices as reported. And all this is the CPI, not PPI!. That link is a good one, relates to a report by somebody inside the government!
All this to be taken with a grain of piquant salt!!!
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