Wednesday, July 23, 2008

Why Food Inflation Will Ease Over The Interim (in pictures)

Rising costs of food has recently caused a stir around the world.

According to the Economist,

``THE soaring cost of food and fuel is a concern for the governments of rich and poor countries alike. Many households in Africa and Asia shell-out more on food and fuel as a share of total spending and so are disproportionately hit by rising prices. But in some poor countries fuel subsidies help to ease the pain.”

courtesy of the Economist

The charts below, courtesy of ino.com, shows why food inflation is likely to subside over the near term…


A breakdown in Rice Prices...

Also in Wheat....

Likewise in soybeans…

And in sugar…

So while you can expect government statistics to nudge lower, politics will remain at a pitch high.

As a reminder, declining food prices reflect moderating economic activities globally and has not been prompted by policymakers.


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