This week we will discuss inflation concern comes mainly from food inflation and another important contributor to inflation is high energy prices (Oil & Gas). After Russia-Ukraine crisis since 24-Feb-22 and sanctions on Russia by US & other European countries inflation have sky rocketed.
Food inflation
The FAO Food Price Index dropped 0.6% mom to 157.4 in May of 2022, the second month of declines, but still remained close to a record high of 159.7 points hit in March.
Energy inflation – Crude oil & Natural Gas
OPEC+ meeting delivered only a modest increase in output despite speculations of a bigger supply boost.
The group of major producers decided to increase output by 648,000 barrels per day in July and August instead of the previously agreed 432,000 bpd, in a move that was seen as hardly enough to compensate for lost supply from Russia.
Central banks meeting this month will try to do a balancing act and try to calm the market but Central banks could do very little to solve supply side problem and could end up doing destruction in an attempt to bring inflation down.
Categories
Global Report – Food Inflation & Energy Inflation
To add to inflation issue was China’s zero tolerance COVID-19 policy, China have started gradually opening up from 1st week of June but return to normalcy will take some time.
The FAO Food Price Index dropped 0.6% mom to 157.4 in May of 2022, the second month of declines, but still remained close to a record high of 159.7 points hit in March.
Click on the attachment to read the full report: