Bank of England Governor Andrew Bailey said during a parliamentary hearing on Monday in London that Rising food costs could have ‘horrific’ consequences for the poorest parts of British society as well as for the global economy as a whole.
Wheat is getting more expensive, ‘seeing the end of the world’
– This is a serious concern not only for our country, but also for the entire developing world – added. The head of the Bank of England argued that countries should do everything to help free the flow of agricultural raw materials. It is primarily about ending the war and the blockade of Ukrainian ports by the Russians. – Ukraine has food supplies, but can’t export it at the moment Bailey explained.
These words did not come out of nowhere. On Monday, wheat futures prices rose by about 6 percent. In the past 10 days, by about 20 percent.
India bans wheat exports
Over the weekend, India, the world’s second largest wheat producer, The ban on the export of this agricultural raw material was announced after the hottest March in history and in connection with other consequences of the Russo-Ukrainian war. Production decreased by 3 million tons from 106 million tons last year, while prices in the domestic market rose by 20-40 percent.
“Hence, the Indian government must secure domestic supplies in the face of heat waves that threaten crops. However, Indian Commerce Minister BVR Subrahmanam assured that India will continue to export to neighboring countries – Bangladesh, Nepal and Sri Lanka. It should be noted that India is not the source The main source of wheat is wheat, as it consumes 102 million tons of the 109 million tons produced, however, the information that such a densely populated country secures its food supply has alarmed investors in raw materials ”- they explained.
– The rise in wheat prices was supported by higher fertilizer prices and a poor harvest – They add.
Russians steal grain
Since the beginning of the war, the Russians have stolen up to half a million tons of grain from Ukrainian farmers, according to estimates by the Ukrainian Minister of Agriculture. As it turned out a few days ago, Bulk carriers loaded with stolen grain move from the Russian-occupied Crimea to the world. Most likely, a ship carrying such a tonnage can be seen in new satellite images from the port in Syria.
What consequences could this have for the world? The kind that Andrew Bailey talked about – tragic. As we wrote in money.pl, A ban on grain exports from Russia and Ukraine could lead to a serious food crisis. Especially in Africa, where the number of countries is sometimes 90 percent. They depend on the import of Russian wheat.
– The world does not have enough food. He has enough to feed the population twice. The problem is not a shortage, but speculation in international markets – He said in March on the “Money. To Counts” program, the professor. Andrzej Polus from the University of Wroclaw.
The problems are already evident in Poland
We can feel the words of the President of the Bank of England in Poland. Since the start of the war in Ukraine, the behavior of food has been what worries the country’s economists the most. Inflation seems to be taking deeper and deeper roots in our country and spreading across the entire market for services and goods.
This is also confirmed by the data from the Central Statistical Office, which we got acquainted with last Friday. April’s reading at 12.4 percent. It was the highest since May 1998 and for 13 months has been well above the upper limit of deviations from the NBP inflation target (3.5% yoy). Within 12 months, fuel prices rose 27.8%. They were defeated minimally by the increase in energy prices (27.3%). However, it’s also bad for food, rising 13.2 percent. every year.
The most striking thing is Big increase in meat prices. Within a year, poultry increased by almost half, and only in the last month – by 14.4 percent. Beef prices jumped in one month by 6.4 percent, and in a year by about 30 percent. In the case of pork, the proportion is 12.1 percent and 15.6 percent, respectively.
Bitter sugar reading. In one month, its price increased by 8.8 percent, compared to April 2021 – by exactly 35 percent. About 25 percent more than a year, you have to pay for the flour, the bread, and the butter. From year to year the cost increases at a multiple rate:
- rice (13.6%),
- fish (13.3%),
- milk (12.8%),
- cheese (12.5%),
- eggs (14.4%)
- Vegetables (12%).
Inflation in our country will not leave
The economists at Credit Agricole, for example, predict that The overall inflation rate will be 12.4%. On an annual basis in 2022 and 7.4 percent in 2023
We expect inflation to peak in June at 14.3%. In our scenario, we assumed that the term of the anti-inflation shield would extend to the end of 2023. If the shield expires earlier (in August 2022 or January 2023), then according to our estimates, inflation will exceed 16%. In the summer of 2022 It will be about 9 percent. Annual average in 2023. We believe that the government will want to avoid the embodiment of such a scenario, given the parliamentary elections scheduled for 2023 – we read in the latest report of the French Bank.
“Coffee enthusiast. Troublemaker. Incurable introvert. Subtly charming twitter scholar. Award-winning social mediaholic. Internet buff.”