[Economist] SHARING pain is usually deemed a good thing. So advocates of dishing out agony will be gladdened that the wallet-crunching pangs of car drivers filling up with petrol are now equalled by the wince-inducing stabs felt by shoppers piling up their supermarket trolleys. As oil prices stay high, wheat prices hit an all-time peak of over $7.50 a bushel for December delivery at the end of trading in Chicago on Thursday August 23rd.
The soaring prices of bushels and barrels are not unconnected. The cost of agricultural commodities, just like oil and metals, has gone up sharply over the past couple of years. Aside from wheat, the prices of corn, rice and barley have all risen by over a third since 2005. Food prices around the world are rising so quickly that a new term has been coined to describe the ballooning price of breakfast staples and dinner-time favourites: agflation.
[TheAge.com] HOW much do you think a litre of milk costs? A dollar? Two dollars maybe? Actually it’s $2.30 and it’s going up so fast the guy in the coffee shop below my office on Flinders Lane has put up a big sign explaining the new prices.
The price of milk has risen 20 per cent in the past year, says Bill Barbour, and he should know. He’s the investment manager at the DWS Global Agribusiness Fund, a $1.6 billion fund from Deutsche Bank that was formed last year to capitalise on what he calls « Ag-flation » — the sudden and irreversible upward momentum in food prices which is going to change the world as we know it.