Prices in piles of basic raw materials to produce food, packaging materials, furniture and machinery have reached astronomical heights due to increased fares and reduced transport capacity (see analysis entitled “Six Times Increased Marine Transport Costs” and increased demand.
In the table below we see how commodity prices have been shaped in the energy, main ore, and food sectors.
For example, corn is a basic product for the manufacture of flour, oils, and feed. This is due to the low degree of productivity in Brazil which has failed to meet the increased demand.
Due to the better harvest in the EU and the US, the price of wheat has started to fall, but remains at a high level of 28.5% compared to June 2020 (Source: FAO – Food and Agricultural Organisation of the United Nations).
Low production in Brazil, the world’s largest sugar exporting country, has caused the price of this product to rise to its highest level since March 2017.
The increase in the price of WTI Crude Oil (Nymex) (see chart below) and the appreciation of real (Brazilian currency) against the US dollar, increased the cost of buying and transporting main products as a raw material for the food and beverage industry.
Prices in all basic types of meat (beef, pork, and poultry) are also on an upward trajectory (see Lean Hogs in the first graph) mainly due to the sudden increase in demand from China and due to the non-opening or under-operation of slaughterhouses in the EU and South America due to a pandemic.
