Charting Global Economy: Soaring Food Costs Risk Destabilization - Financial Post | Canada News Media
Connect with us

Economy

Charting Global Economy: Soaring Food Costs Risk Destabilization – Financial Post

Published

 on


Article content

(Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Record-high food inflation is tightening its grip on the global economy, most critically in developing nations where financial distress is contributing to increased political instability.

The costs of staples such as wheat and cooking oils continue to accelerate as Russia’s war in Ukraine, a key exporter of commodities, upends trade and fuels concern about shortages. High energy prices are also adding to inflationary pressures. 

Advertisement 2

Article content

In Sri Lanka, consumer prices accelerated to about 19% — the highest in Asia — and could keep climbing to 25%, according to the central bank, which just increased interest rates by an unprecedented seven percentage points. The soaring costs have sparked street protests calling for the president’s ouster.

An emergency meeting by Pakistan’s central bankers resulted in the biggest rate hike since 1996 as more political chaos and higher oil prices risk developing into a full-blown economic crisis. 

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

World

Global food prices are surging at the fastest pace ever as Russia’s war in Ukraine chokes crop supplies, piling more inflationary pain on consumers and worsening a global hunger crisis. The war has wreaked havoc on supply chains in the crucial Black Sea breadbasket region, upending global trade flows and fueling panic about shortages of key staples such as wheat and cooking oils.

Advertisement 3

Article content

Across Ukraine’s farm belt, silos are bursting with 15 million tons of corn from the autumn harvest, most of which should have been hitting world markets. The stockpiles — about half the corn Ukraine had been expected to export for the season — have become increasingly difficult to get to buyers, providing a glimpse into the war has wrought in the approximately $120 billion global grains trade.

Emerging Markets

Pakistan’s central bank raised interest rates by 250 basis points following an emergency meeting, as escalating political chaos at home and higher global oil prices threaten to spill over into a full-blown economic crisis. The key rate now stands at 12.25%. Central banks in Peru, Uruguay, Romania, Poland and Serbia also tightened policy.

Advertisement 4

Article content

Sri Lanka’s central bank also raised borrowing costs — by an unprecedented 700 basis points amid economic and political turmoil that has sparked street protests and left President Gotabaya Rajapaksa with a minority in parliament.

Turkish inflation soared to a fresh two-decade high in March, leaving the lira increasingly vulnerable by depriving the currency of a buffer against market selloffs. Turkey’s ultra-loose monetary policy is out of sync with the rising hawkishness of many of the world’s central banks at a time its economy is bracing for commodity shocks unleashed by Russia’s invasion of Ukraine.

Europe

European natural gas prices gained after five days of declines on concerns that Russian flows through key transit country Ukraine may be disrupted. Russian military operations are putting the stability of flows to Europe at risk, Gas Transmission System Operator of Ukraine said.

Advertisement 5

Article content

German factory orders fell for the first time in four months in the runup to Russia’s invasion of Ukraine, underscoring concerns over slower growth in Europe’s largest economy. Expectations for Germany’s economic recovery have been slashed after the war in Ukraine sent energy prices higher.

Chancellor Olaf Scholz reiterated his opposition to reversing Germany’s exit from nuclear power to help cut reliance on Russian energy, saying the technical challenges would be too great. Germany is rushing to end its heavy dependence on Russian fossil fuels but the process has been complicated by the decision by former Chancellor Angela Merkel’s previous government to shut down the country’s nuclear power plants. 

Advertisement 6

Article content

U.S.

The U.S. trade deficit held close to a record in February as the merchandise shortfall shrank and the surplus in services declined, partly reflecting the impact of broadcast rights for the Olympics. Services imports increased to a record $51.6 billion, with about half of the rise coming from the biggest monthly increase in charges for use of intellectual property since 2016.

Spot rates for shipping goods in containers to the U.S. from Asia fell for a sixth straight week, the longest skid of the pandemic, as Covid-19 lockdowns disrupt trucking, warehouses and port operations in China. The market for ocean freight is softening partly because that’s what it typically does after Chinese Lunar New Year. There’s also growing uncertainty about U.S. consumer demand for goods given the broader acceleration in inflation and a shift back to services.

Advertisement 7

Article content

Asia

Containers full of frozen food and chemicals are piling up at China’s biggest port in Shanghai as the lock down of the city and virus testing means truckers can’t get to the docks to pick up boxes. Shanghai is now the epicenter of China’s worst Covid outbreak in two years, with almost 20,000 new cases reported just on Wednesday. 

Japan’s household spending dropped in February for a second straight month amid virus restrictions, adding to evidence that the economy contracted last quarter as Prime Minister Fumio Kishida’s government mulls support measures. Outlays fell 2.8% from January, led by drops in spending on transport, communications and housing.

Japanese households’ inflation expectations climbed to the highest level in more than 13 years as rising energy costs impacted sentiment, even as overall price gains remain well below the Bank of Japan’s target.

©2022 Bloomberg L.P.

Bloomberg.com

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Adblock test (Why?)



Source link

Continue Reading

Business

A timeline of events in the bread price-fixing scandal

Published

 on

 

Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

Published

 on

 

TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

 on

 

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version