K A S H R U T . C O M_©

Prices are rising all over the world, and leaders see no quick fix

January 24, 2021 from The Washington Post:

"It probably isn’t much consolation for Americans struggling with the highest inflation in 40 years, but they are not alone.

"In the European Union, prices are rising faster than at any time since the euro currency was introduced. The annual inflation rate in the United Kingdom hit 5.4 percent in December, the highest figure there in nearly 30 years. Canada’s consumer prices are rising twice as fast as before the pandemic.

"Even in Japan, where prices have been depressed almost continuously since the collapse of the late 1980s real estate bubble, the central bank in recent days revised upward its assessment of inflation risks for the first time in eight years. Among major economies, only China has a lower inflation rate today than in early 2020.

"Around the world, soaring prices are emerging as a feature of the pandemic-era recovery, prompting some central banks to pivot to inflation fighting.

"As factories around the world revive at different speeds, a mismatch between the goods that are being produced and those that customers want to buy is helping drive prices higher. Longer-term trends, such as increased protectionism, rising Chinese wages and the adjustment to a low-carbon economy, will put upward pressure on prices in the years ahead, according to research by the BlackRock Investment Institute.

"Snarled global supply chains, afflicting ports in Rotterdam and Shanghai as well as in Los Angeles, are driving up costs around the world. Increasing commodities costs, including food and energy, are doing likewise.

"Over the past year, global oil prices are up more than 55 percent. Nickel, used in automotive and aerospace plants, is up 27 percent. And coffee has almost doubled in price.

"Those bills are hitting customers everywhere, including in the United States. Over the past year, prices of imports — especially food, fuel and industrial parts — have risen by more than 10 percent, according to the Bureau of Labor Statistics. That was the largest one-year increase since 2007.

"In response, major U.S. companies are hiking retail prices. Procter & Gamble, maker of Tide laundry detergent and Bounty paper towels, told investors last week that higher commodity costs represented a $2.3 billion annual head wind while freight costs were up $300 million. The company said it had raised prices in all 10 of its product categories, boosting profits.

Supply chain shortages still affecting industry

January 24, 2021 from The National Restaurant Association:

"Everything, from proteins to dish soap to fryer oil, packaging materials, and in some cases, even replacement parts for kitchen equipment, are in short supply. And, when a restaurateur can get his or her hands on those items, they can’t seem to get enough of them and are paying much higher prices for what they can get.

"in addition to shortages, restaurateurs say they are paying higher prices for different food items, but Founding Farmers’ Simons says he thinks prices will start to come down by 2Q of 2022."