Price increases

Akahata today publishes a list of planned price increases for foods and other commodities. Many companies are raising prices due to higher crude oil prices. Another reason is that international hedge funds are investing in grains as these may be becoming scarce, and the short-term profits are of course very tempting for financial brokers. Akahata, the Japanese Communist Party's newspaper, notes that incomes remain low, and price increases will have a serious impact on households.

Here are some of the announced price hikes listed in the article:

Gasoline 1.7 to 2.0 yen/liter increase
Beer 3 to 5 % increase
Food 5.6 to 20 % increase
Cheese, margarin 6-25 % increase
Coffee 20-30 yen increase
Domestic Pasta 15-20 % increase
Soy sauce 11 % increase
Milk 4.7 % increase

Gasoline, electricity and gas prices are also increasing this spring, and air fare hikes at 9 % have been announced by several Japanese airlines. My gas company just told me to expect a rate increase from February, due in part to the US subprime financial problems and sustained high crude oil prices.

Akahata: 値上げ止まらず

Meanwhile, over at Financial Times, Gideon Rachman writes about The global battle for food, oil and water:

The costs of food and energy are rising fast. The availability of water is also becoming an issue, from Australia to Africa. The struggle for these three basic commodities – food, energy and water – came up repeatedly in Davos.

Globalisation – in particular the rise of China and India – is driving a lot of these changes. The world oil price has risen by 80 per cent over the past 12 months and – since 2001 – China alone has accounted for about 40 per cent of the increase in oil demand. Global food prices have gone up by about 50 per cent this year. There are short-term reasons for this, such as a drought in Australia and pig disease in China. But the biggest long-term driver of increased prices is growing wealth in China and India.

Time for lunch.


Anonymous said…
How dare those developing nations make the prices in our already developed ones go up! Hedge funds are part of the market adjustment process reacting to underlying forces. By themselves they do not cause prices to rise.

Too many people, economies based on non-stop growth, finite world= rising prices and shortages. The communists and progressives and most greens are cornucopians just as are the right wing economic interests. They all think that growth and populations should be able to go on forever with no consequences and only differ on how it should be distributed.

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