FAST FIVE: Global Food Prices Rise Again, Hitting New Decade High 

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Sugar prices averaged 120.7 points in November, up 1.4% from October, reversing most of the previous month's decline.

Compared to last year, prices are up a stunning 40%.  Vegetable oil and meat prices were slight down in November but were both up substantially over the year.  The question central banks, governments, commodity traders, and households have on their minds is when do food prices reverse. To answer that question, Judy Ganes, the president of J.

Ganes Consulting, recently told Bloomberg that rising food prices should continue into the second half of 2022.  “We're not seeing a turning point just yet, we'll probably see it, my guess is the middle of next year. There's a point where high prices are the best cure for high prices, there's a point where its going to have to resolve itself,” Ganes said.  She pointed out rising prices were due to a combination of factors, such as caps on migration, red hot labor market, labor shortages, adverse weather conditions, snarled supply, higher fertilizer prices, and soaring transportation costs.

Ganes said the end to several major droughts and increased rainfall in major producing regions means global food production in 2023-24 will be “much improved.”  With at least another year or more of food inflation, Cargill CEO David MacLennan recently changed his mind about “transitory” inflation and now believes it will be more persistent with higher food prices in 2022.

Soaring food prices are unlikely to reverse in early 2022 and are crushing emerging market consumers and the working poor in developed countries.  Almost one year ago, SocGen's Albert Edwards pointed out rising food prices would lead to discontent and social instabilities in the weakest countries.  Tyler Durden Fri, 12/03/2021 – 02:45.

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