World Bank warns Food Prices could jump 37% is “human catastrophe”

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Ukraine war: World Bank warns of ‘human catastrophe’ food crisis
  • The world faces a “human catastrophe” from a food crisis arising from Russia’s invasion of Ukraine, World Bank president David Malpass has said.
  • He told the BBC that record rises in food prices would push hundreds of millions people into poverty and lower nutrition, if the crisis continues.
  • The World Bank calculates there could be a “huge” 37% jump in food prices.
  • This would hit the poor hardest, who will “eat less and have less money for anything else such as schooling”
  • Food prices are at their highest since records began 60 years ago, according to the index, after they jumped nearly 13% in March, following February’s record high.

Read the original article by clicking here.

Prices of Food and Fuel have people protesting in Peru

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Peru president imposes curfew in Lima, Callao after protests
  • Protests had erupted across Peru in recent days due to a hike in fuel prices and tolls, during a time of rising food prices.
  • “In view of the acts of violence that some groups have wanted to create… and in order to reestablish peace… the Council of Ministers has approved the declaration of citizen immobility (curfew) from 2:00 am to 11:59 pm on Tuesday, April 5,” he said in a televised message.
  • Castillo’s action to impose movement restrictions — which will cover more than 10 million residents in Lima and Callao — was met with immediate repudiation.
  • “It is like putting an end to traffic accidents by taking vehicles off the roads.”
  • The country’s Consumer Price Index in March saw its highest monthly increase in 26 years, driven by soaring food, transport and education prices, according to the national statistics institute.

Read the original article by clicking here.

Agriculture research shows Food Prices the highest in the past 14 years

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Food prices will see biggest increase in 14 years, according to Missouri researchers
  • According to the Food and Agricultural Policy Research Institute, a think tank at the University of Missouri, food prices will be at least 5% higher in 2022 compared to last year. That’s the biggest single-year increase in 14 years.
  • While prices will be up across the board, Westhoff said some foods will see especially high costs.
  • “We have seen much larger increases year over year for meats, for fats and oils, and for fresh fruits than you did for most other products,” he said.

Read the original article by clicking here.

Middle East and North Africa feeling effects of War in Ukraine as prices soar for basic items

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • War in Ukraine pushes Middle East and North Africa deeper into hunger as food prices reach alarming highs
  • As the Muslim holy month of Ramadan begins, the soaring cost of food staples in import-dependent Middle Eastern and North African countries is creating ever greater challenges for millions of families already struggling to keep hunger at bay, the United Nations World Food Program (WFP) said today.
  • The prices of wheat flour and vegetable oil – two key staples in the diet of most families – have consequently risen across the region. Cooking oil is up 36 percent in Yemen and 39 percent in Syria. Wheat flour is up 47 percent in Lebanon, 15 percent in Libya and 14 percent in Palestine.
  • The cost of a basic food basket – the minimum food needs per family per month – registered an annual increase of 351 percent in Lebanon, the highest in the region. It was followed by Syria, with a 97 percent rise, and Yemen with 81 percent hike

Read the original article by clicking here.

Expect Inflation to hit 10% analysts warn

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Russia’s Ukraine war threatens to blow US food prices sky-high
  • Inflation nearing a dangerous high, experts warn
  • It began with a rapid rise in gas prices. Now, with Russian oil banned in the United States and energy scarcity heightened globally, experts say shoppers can expect their grocery bills to rise in coming months
  • Russia and Ukraine produce 25% of the global wheat supply, according to the Observatory for Economic Complexity. While neither of these countries export wheat to the U.S. directly, their absence from the global market is expected to strain supply and push prices higher.
  • “It comes an absolutely horrible time for American consumers because we’re looking every day at inflation almost reaching 10%,” Dan Varroney

Read the original article by clicking here.

Food Prices Hit Record High Year to Year 20.7%

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Food prices jump 20.7% yr/yr to hit record high in Feb, U.N. agency says
  • Higher food prices have contributed to a broader surge in inflation as economies recover from the coronavirus crisis and the FAO has warned that the higher costs are putting poorer populations at risk in countries reliant on imports.
  • FAO said its vegetable oils index rose 8.5% month-on-month in February to chalk up another record high
  • Ukraine and Russia account for about 80% of global exports of sunflower oil.
  • The cereal price index rose 3.0% on the month, with maize prices up 5.1% and wheat prices increasing 2.1%
  • AO’s dairy price index increased 6.4%, its sixth consecutive monthly rise, underpinned by tight global supplies

Read the original article by clicking here.

“Inflation” – It looks like it’s going to get worse despite jobs report

Revelation 6:6 ESV And I heard what seemed to be a voice in the midst of the four living creatures, saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius, and do not harm the oil and wine!”

Important Takeaways:

  • Gas, food prices surging amid inflation tantrum: Can wages keep up?
  • Economists warn inflation getting worse despite ‘positive’ jobs report
  • Gas prices being such a public price have outsized their share of our budgets, what we spend,” Goolsbee told Fox News’ Bill Hemmer, “they have an outsized impact on consumer confidence.”
  • “In fact, it looks like it’s getting worse,” Moore added. “I mean, oil hit $90 a barrel. That’s the equivalent of paying about $4 to $4.50 a gallon.”

Read the original article by clicking here.

Fertilizer shortage may lead to spring scramble on North America’s farms

By Rod Nickel

(Reuters) – A global shortage of nitrogen fertilizer is driving prices to record levels, prompting North America’s farmers to delay purchases and raising the risk of a spring scramble to apply the crop nutrient before planting season.

Farmers apply nitrogen to boost yields of corn, canola and wheat, and higher fertilizer costs could translate into higher meat and bread prices.

World food prices hit a 10-year high in October, according to the United Nations food agency, led by increases in cereal crops like wheat and vegetable oils.

The Texas Arctic Blast in February and Hurricane Ida in August disrupted U.S. fertilizer production. Then, prices of natural gas, a key input in producing nitrogen, soared in Europe due to high demand and low supplies. Global urea prices this month topped $1,000 per tonne for the first time, according to BMO Capital Markets. Russia and China have curbed exports.

In the United States, nitrogen fertilizer supplies are adequate for applications before winter, said Daren Coppock, CEO at U.S.-based Agricultural Retailers Association. Applying fertilizer before winter reduces farmers’ spring workload.

But with prices so high, some farmers are delaying purchases, risking a scramble for supplies during their busiest time of year, Coppock said.

Global nitrogen fertilizer sales were worth $53 billion in 2020, and prices are at least 80% higher so far this year, according to Argus Media.

Normally, MKC, a Kansas farm cooperative, sells fertilizer to farmers for payment up front with delivery months down the road, giving growers certainty about a key expense.

With prices soaring, MKC has scaled back its pre-paid sales out of caution.

“You just don’t know what the price is going to be. It has put a lot of retailers in a tough spot,” said Troy Walker, MKC’s director of retail fertilizer.

Delaying fertilizer purchases until spring runs the risk of further supply chain congestion as farmers rush to apply fertilizer and plant seed during a tight window.

“There’s going to be a lot of people who wait and see,” Coppock said. “(But) if everybody’s scrambling in the spring to get enough, somebody’s corn isn’t going to get covered.”

Wisconsin farmer Jim Zimmerman decided to bite the bullet and secure all his fertilizer for spring, this year.

“It’s next year’s prices I’m worried about,” Zimmerman said. “It could get worse.”

Nutrien Ltd, the largest U.S. farm supplier, has secured less nitrogen fertilizer than usual for spring delivery because manufacturers are making less available, said Jeff Tarsi, the company’s senior vice president of retail. Sales to farmers are likely to occur closer to spring than usual, he said.

The one nitrogen product that is running short in North America is urea ammonium nitrate (UAN), said Kreg Ruhl, crop nutrients manager at Illinois-based farm cooperative Growmark. UAN is a liquid form that is convenient for farmers to apply.

The U.S. International Trade Commission is conducting an anti-dumping investigation into UAN from Russia and Trinidad and Tobago, at the request of U.S. producer CF Industries.

Importers are reluctant to book shipments into 2022, because they may have to pay retroactive duties if CF wins its case, Ruhl said.

Farmers could reduce their fertilizer needs by planting more soybeans and less corn, but there is little evidence many plan to do so.

The U.S. Department of Agriculture forecast U.S. corn plantings would decline to 92 million acres in 2022, from 93.3 million in 2021.

Waiting until spring to buy fertilizer could disappoint some farmers, said Matt Conacher, senior fertilizer manager at Federated Cooperatives Limited, a Canadian wholesale seller.

“My advice is, if you can get your fertilizer now, do so.”

(Reporting by Rod Nickel in Winnipeg; Additional reporting by Julie Ingwersen in Chicago; Editing by Caroline Stauffer and Lisa Shumaker)

Gasoline, auto retailing boost U.S. producer prices

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. producer prices increased solidly in October, driven by surging costs for gasoline and motor vehicle retailing, suggesting that high inflation could persist for a while amid tight global supply chains related to the pandemic.

The Federal Reserve last week restated its belief that current high inflation is “expected to be transitory.” A tightening labor market as millions remain at home is adding to price pressures, which together with shortages of goods sharply restrained economic growth in the third quarter.

The Fed this month started reducing the amount of money it is injecting into the economy through monthly bond purchases.

“The acceleration in inflation may not fade as quickly as previously thought, particularly for businesses because of the global supply-chain issues,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Elevated inflation is turning up the heat on the Fed but they haven’t shown signs of buckling as they will stomach higher inflation to get the labor market back to full employment quickly.”

The producer price index for final demand rose 0.6% last month after climbing 0.5% in September, the Labor Department said on Tuesday. That reversed the slowing trend in the monthly PPI since spring. In the 12 months through October, the PPI increased 8.6% after a similar gain in September.

Economists polled by Reuters had forecast the PPI advancing 0.6% on a monthly basis and rising 8.7% year-on-year.

More than 60% of the increase in the PPI last month was due to a 1.2% rise in the prices of goods, which followed a 1.3% jump in September. A 6.7% surge in gasoline prices accounted for a third of the rise in goods prices. There were increases in the prices of diesel, gas and jet fuel as well as plastic resins.

Wholesale food prices dipped 0.1% as the cost of beef and veal tumbled 10.3%. Prices for light motor trucks fell as the government introduced new-model-year passenger cars and light motor trucks into the PPI.

Exorbitant motor vehicle prices have accounted for much of the surge in inflation as a global semiconductor shortage linked to the nearly two-year long COVID-19 pandemic has forced manufactures to cut production, leaving virtually no inventory.

Services gained 0.2% last month after a similar rise in September. An 8.9% jump in margins for automobiles and parts retailing accounted for more than 80% of the increase in services. The cost of transportation and warehousing services jumped 1.7%, also reflecting snarled supply chains.

Surveys from the Institute for Supply Management this month showed measures of prices paid by manufacturers and services industries accelerating in October. Manufacturers complained about “record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products.”

Data on Wednesday is expected to showed strong gains in consumer prices in October, according to a Reuters survey of economists. Stocks on Wall Street retreated from record highs. The dollar was steady against a basket of currencies. U.S. Treasury prices rose.

PORT CONGESTION

There is congestion at ports and widespread shortages of workers at docks and warehouses. There were 10.4 million job openings as of the end of August. The workforce is down 3 million from its pre-pandemic level.

Worker shortages were underscored by a report from the NFIB on Tuesday showing almost 50% of small businesses reported job openings they could not fill in October.

Also on Tuesday, Fed Chair Jerome Powell emphasized the U.S. central bank’s commitment to maximum employment, telling a virtual conference on diversity and inclusion in economics, finance and central banking that “an economy is healthier and stronger when as many people as possible are able to work.”

Wholesale prices of apparel, footwear and truck transportation of freight also rose last month as did the costs of food and alcohol retailing, hospital outpatient care as well as machinery, equipment parts and supplies.

Excluding the volatile food, energy and trade services components, producer prices shot up 0.4%. The so-called core PPI gained 0.1% in September. In the 12 months through October, the core PPI rose 6.2%. That followed a 5.9% advance in September.

Construction prices surged 6.6%, the largest gain since the series was incorporated into the PPI data in 2009.

“As companies feel the squeeze from higher energy and labor costs, as well as persistent logistics issues, producer price increases should be robust in the coming months,” said Will Compernolle, a senior economist at FHN Financial in New York.

Details of the PPI components, which feed into the personal consumption expenditures (PCE) price index, excluding the volatile food and energy component, were mixed. The core PCE price index is the Fed’s preferred measure for its flexible 2% target. Healthcare costs increased 0.4%. Airline tickets rebounded 0.3%, but portfolio management fees dropped 2.2%.

Though the October CPI data is still pending, economists believed that the core PCE price index moved higher last month after increasing 3.6% year-on-year in September.

“For now, we think the core PCE price index will be up 3.8% year-on-year in October,” said Daniel Silver, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

World Bank sees ‘significant’ inflation risk from high energy prices

By Andrea Shalal

WASHINGTON (Reuters) -Energy prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday.

The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021.

“The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said Ayhan Kose, chief economist and director of the World Bank’s Prospects Group, which produces the Outlook report.

“The sharp rebound in commodity prices is turning out to be more pronounced than previously projected. Recent volatility in prices may complicate policy choices as countries recover from last year’s global recession.”

The International Monetary Fund, in a separate blog, said it expected energy prices to revert to “more normal levels” early next year when heating demand ebbs and supplies adjust. But it warned that uncertainty remained high and small demand shocks could trigger fresh price spikes.

The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier.

Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding demand for electricity, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.

It warned that further price spikes could occur in the near-term given current low inventories and persistent supply bottlenecks. Other risk factors included extreme weather events, the uneven COVID-19 recovery and the threat of more outbreaks, along with supply-chain disruptions and environmental policies.

Higher food prices were also driving up food-price inflation and raising questions about food security in several developing countries, it said.

The bank projected crude oil prices would reach $74/bbl in 2022, buoyed by strengthening demand from a projected $70/bbl in 2021, before easing to $65/bbl in 2023.

The use of crude oil as a substitute for natural gas presented a major upside risk to the demand outlook, although higher energy prices may start to weigh on global growth.

The bank forecast a 5% drop in metals prices in 2022 after a 48% increase in 2021. It said agricultural prices were expected to decline modestly next year after jumping 22% this year.

It warned that changing weather patterns due to climate change also posed a growing risk to energy markets, potentially affecting both demand and supply.

It said countries could benefit by accelerating installation of renewable energy sources and by cutting their dependency on fossil fuels.

(Reporting by Andrea Shalal; editing by Diane Craft)