Lord Prices’ Market Report – February
Food prices on the rise
World food prices rose to a record high in January, according to the UN’s Food and Agricultural Organisation. The FAO Food Price Index, which measures the wholesale price of basic foods within a basket, averaged an increase of 3.4% from December. It is the seventh monthly rise for the index. The individual group components of the index all registered rises in January, apart from meat. Well that’s a lot of good to us, as that’s the only thing we don’t stock!
Pecan nuts up in price
Just about everything has a firm trend to it at present, except for ….. prunes. That’s good news for the us oldies. Also pine nuts are drifting slightly as they almost priced themselves out of the market. Prevailing market factors on most commodities remain the same: poor crops, intensified demand from China, India, increased fuel costs etc. You may have noticed the sudden hike in pecan prices. This was entirely down to what sounded like a dawn raid by China on the US pecan harvest, buying a vast amount of the current crop in shell. The market jumped several thousand pounds a tonne overnight. Lentils remain volatile due to poor quality crops in Canada and floods in Australia. Chick peas are also very firm; a good crop but farmers have been planting wheat instead as its easier to grow and more profitable.
Honey’s also costing more money
Honey is looking increasingly dodgy; price increases fueled by poor supply and inconsistent quality. Manuka honey is particularly affected; the higher ratings will become scarce. Another case in point is coffee, where three consecutive poor harvests in Colombia have put pressure on other Central and South American countries. This coupled with an increase in demand from the developing countries, reported poor harvests in Indonesia due to the La Nina weather pattern and massive commodity speculation. Whilst the first two reasons are normal supply/demand issues which naturally lead to price fluctuations, commodity speculation is becoming increasingly influential. With interest rates at historic lows, low share dividend yields and volatile stock markets, there is a lack of safely profitable investment locations. Fund managers now recognise the raw materials of common foodstuffs as potentially profitable commodities. In case you wondered where it had gone, much of the cash that has been pumped into the banking sector is fueling this type of activity rather than helping out small businesses or first time buyers.
Cup of hot couvature?
And on a completely different note, have you noticed the trend among up market purveyors of chocolate to refer to it as “couvature”. As cocoa prices spiral this is fast becoming the name for real chocolate which differentiates it from your standard British excuse for the same.