By Guy Faulconbridge and Andrew MacAskill and Daniel Leussink and Leika Kihara
LONDON/TOKYO (Reuters) – From bowls of meat in Tokyo to fried chicken in London, consumers are beginning to feel the impact of rising costs that are sweeping across the global economy.
The resumption of economic activity in the wake of coronavirus restrictions exposes shortages in the supply chain, and companies rush to find employees, ships and even fuel to power factories, which threatens recovery.
The UK’s biggest chicken producer has warned that the 20-year spree of cheap food is coming to an end and that food price inflation could reach double digits.
As it emerges from Brexit and Covid, the world’s fifth-largest economy faces an acute shortage of warehouse workers, truck drivers and butchers, exacerbating pressures on global supply chains.
“The days when you could feed a family of four a three-pound sterling ($4) chicken are coming to an end,” said Ranjit Singh Boparan, owner of the 2 Sisters Group.
Even in Japan, where weak growth hasn’t overpriced many things for decades, including wages, consumers and businesses are facing a price shock for staples like coffee.
Core Japanese consumer inflation only stopped falling in August, ending a 12-month deflationary period. Economists and officials believe they will see recent price increases reflected in official data in the coming months.
With central bankers around the world on alert and inflation in Spain, Ireland and Sweden hitting 13-year highs, European Central Bank President Christine Lagarde repeated that there were no signs the recent increase was being incorporated into wages.
“The impact of these factors should come out of annual price rates over the next year, dampening annual inflation,” he said.
Eurozone inflation is expected to reach 4% before the end of the year, double the ECB’s target, and a growing number of economists see prices remaining above the target during 2022.
In the United States, President Joe Biden on Wednesday called on the private sector to help ease the supply chain hurdles that are threatening to affect the country’s holiday celebrations.
Biden said the Port of Los Angeles will join the Port of Long Beach to expand around-the-clock operations to unload about 500,000 containers, while Walmart, Target and other major retailers will expand their overnight operations to try to meet delivery needs.
As winter approaches the northern hemisphere, prospects are worsening due to reduced energy supply. Cold weather in northern China has pushed coal prices closer to record highs, and power plants are hoarding fuel to ease an energy crisis that boosted producer inflation to a September high of at least 25 years.
The energy crisis, caused by coal shortages, high fuel prices and rising post-pandemic industrial demand, has halted production at several Chinese factories, including suppliers to major global brands like Apple.
There are little signs of any easing in energy costs, with Brent crude oil futures above $84 a barrel on Thursday, as expectations that rising natural gas prices will trigger a shift to crude oil to meet winter heating needs boosted demand.
“Higher energy prices are also adding to inflationary pressures that, along with energy shortages, could lead to lower industrial activity and a slowdown in economic recovery,” said the International Energy Agency (IEA)
(Additional reporting by Muyu Xu, Shivani Singh, David Stanway, Noah Browning, James Davey, Liangping Gao, Stella Qiu and Ryan Woo)
((Translation of the São Paulo Newsroom, 55 11 5047 2984)) REUTERS CMO
+ Until 2019, there were more people in prisons than on the Brazilian stock exchange
+ Aloe gel in the drink: see the benefits
+ Lemon-squeezing trick becomes a craze on social media
+ Chef playmate creates aphrodisiac recipe for Orgasm Day
+ Mercedes-Benz Sprinter wins motorhome version
+ Anorexia, an eating disorder that can lead to death
+ US agency warns: never wash raw chicken meat
+ Yasmin Brunet breaks the silence
+ Shark is captured in MA with the remains of youngsters missing in the stomach
+ See how much it costs to eat at the MasterChef judges’ restaurants
+ Auction of cars and motorcycles from Kombi to Nissan Frontier 0km