Post by Steve Gardner on Dec 18, 2007 22:42:15 GMT
Source: News Aspects
Global food prices are out of control.
In Chicago early trading today, the new benchmark price of wheat for March delivery rose 30 cents to $10.09½ a bushel, more than 7.5 per cent higher than the expiring December contract of $9.39 and first time it has ever traded over $10 a bushel. The December contract expired on Friday and the March 2008 contract became the market’s benchmark today.
New benchmark prices for corn are also more than 5 per cent higher than previously. Corn for March 2008 rose to $4.43¼ a bushel, the highest level in 11 years for a front-month contract.
The benchmark prices for soyabeans delivered in January rose on Friday to a fresh 34-year high of $11.92¼ a bushel.
Rice, also for January, has jumped to an all-time high of $13.310 a hundredweight.
In the UK, food inflation was already running at an annual 5.1 per cent in October and analysts expect higher food prices to push overall inflation up for November. The UK November figures are due to be published tomorrow.
The Italian Central Statistics Institute recently released figures which show that in October alone, bread prices increased 10.3%; pasta, 6.4%; milk, 5%; poultry, 7.3%, fruit, 5.3%. If price increases in August and September are added in, Italian consumer associations calculate an average increase of €400 for the average family food bill at the end of the year
And in Germany, between November 2006 and 2007: bread increased 5.4%; butter 46.1%; Camembert cheese 10.4%; eggs 6.2%; yogurt 11.1%; milk between 22.9% and 27.9% (depending on the category); noodles 6.2%; fruits 3.3% (but green paprika even 21.4%!); curd cheese 37.2 %; wheat flour 19%; rice 6.6%; salt 4.7%.
Bill Lapp, analyst at US consultancy Advanced Economic Solutions, told the FT today: “We’ve already seen food prices increase this year at their fastest pace since the early 1980s, but the full brunt of those increases will begin in earnest in 2008.”
In September 2007, I wrote to my MP, David Gauke, who sits on the Conservative Party Shadow Treasury team, expressing my concerns of the even then obvious economic collapse and inflationary pressures. He replied:
“You raised a number of important issues … First you raised the prospect of ‘the collapse of the global economic system’ and the emergence of hyper inflation. However, as far as the UK is concerned, most commentators seem to believe that inflation will remain around the 2% CPI target and, if anything, the recent turbulence in the financial markets may result in CPI inflation falling below this figure. My personal view is that there are concerns about inflation in that Gordon Brown’s fiscal policies have made the Bank of England’s job more difficult and that the interest rate cut in August 2005 was a mistake and that subsequent corrective action was necessary. However, I do not believe that hyper-inflation or the collapse of the global economic system is imminent.”
Well, Dave, all I can say is, oops …
Global food prices are out of control.
In Chicago early trading today, the new benchmark price of wheat for March delivery rose 30 cents to $10.09½ a bushel, more than 7.5 per cent higher than the expiring December contract of $9.39 and first time it has ever traded over $10 a bushel. The December contract expired on Friday and the March 2008 contract became the market’s benchmark today.
New benchmark prices for corn are also more than 5 per cent higher than previously. Corn for March 2008 rose to $4.43¼ a bushel, the highest level in 11 years for a front-month contract.
The benchmark prices for soyabeans delivered in January rose on Friday to a fresh 34-year high of $11.92¼ a bushel.
Rice, also for January, has jumped to an all-time high of $13.310 a hundredweight.
In the UK, food inflation was already running at an annual 5.1 per cent in October and analysts expect higher food prices to push overall inflation up for November. The UK November figures are due to be published tomorrow.
The Italian Central Statistics Institute recently released figures which show that in October alone, bread prices increased 10.3%; pasta, 6.4%; milk, 5%; poultry, 7.3%, fruit, 5.3%. If price increases in August and September are added in, Italian consumer associations calculate an average increase of €400 for the average family food bill at the end of the year
And in Germany, between November 2006 and 2007: bread increased 5.4%; butter 46.1%; Camembert cheese 10.4%; eggs 6.2%; yogurt 11.1%; milk between 22.9% and 27.9% (depending on the category); noodles 6.2%; fruits 3.3% (but green paprika even 21.4%!); curd cheese 37.2 %; wheat flour 19%; rice 6.6%; salt 4.7%.
Bill Lapp, analyst at US consultancy Advanced Economic Solutions, told the FT today: “We’ve already seen food prices increase this year at their fastest pace since the early 1980s, but the full brunt of those increases will begin in earnest in 2008.”
In September 2007, I wrote to my MP, David Gauke, who sits on the Conservative Party Shadow Treasury team, expressing my concerns of the even then obvious economic collapse and inflationary pressures. He replied:
“You raised a number of important issues … First you raised the prospect of ‘the collapse of the global economic system’ and the emergence of hyper inflation. However, as far as the UK is concerned, most commentators seem to believe that inflation will remain around the 2% CPI target and, if anything, the recent turbulence in the financial markets may result in CPI inflation falling below this figure. My personal view is that there are concerns about inflation in that Gordon Brown’s fiscal policies have made the Bank of England’s job more difficult and that the interest rate cut in August 2005 was a mistake and that subsequent corrective action was necessary. However, I do not believe that hyper-inflation or the collapse of the global economic system is imminent.”
Well, Dave, all I can say is, oops …
