© Reuters. File Photo: A money changer will sell US dollar bills at a currency exchange office in Ankara, Turkey, on September 24, 2021. REUTERS / Cagla Gurdogan
Guy Faulconbridge, Andrew MacAskill, Daniel Leussink, Leika Kihara
London / Tokyo (Reuters)-From beef bowls in Tokyo to fried chicken in London, consumers are beginning to feel a pinch from the soaring costs of the global economy.
The recovery of economic activity as a result of the relaxation of coronavirus restrictions has exposed shortages throughout the supply chain, threatening the recovery by companies seeking fuel for workers, ships and even power plants.
Britain’s largest chicken producer warned that the country’s 20-year cheap binge eating is nearing its end, saying food price inflation could reach double digits.
“The days of being able to feed a family of four with three pounds ($ 4) of chicken are nearing the end,” said Ranjitha Amunugardan, owner of the Two Sisters Group.
As the world’s fifth-largest economy handles Brexit and COVID-19, a serious shortage of warehouse workers, truck drivers and butchers exacerbates the tensions felt globally by international business. ..
IKEA is leasing more ships, buying containers and rerouting goods between warehouses as the world’s largest furniture brands are trying to mitigate the “perfect storm” of global supply chain turmoil. increase.
Inter IKEA CEO Jon Abrahamsson warns Reuters IKEA of supply chain disruptions that are likely to last until 2022 and expects the crisis to last until 2022, about four minutes for IKEA products. He said the biggest challenge was to get the goods out of China, where one of them is manufactured.
According to IKEA, stores in North America are most affected by product shortages, followed by Europe.
In the United States, President Joe Biden called on Wednesday to help the private sector ease supply chain blockages that could disrupt the US holiday season.
According to Biden, the Port of Los Angeles joins the Port of Long Beach, unloading about 500,000 containers 24 hours a day, and Wal-Mart (NYSE :) the goal (NYSE :) and other major retailers will expand their night business to help.
Even in Japan, where growth is sluggish and prices of many things, not just wages, have not risen much in recent decades, consumers and businesses are facing basic price shocks such as coffee and beef bowls.
Japan’s major consumer inflation rate stopped declining in August, causing 12 months of deflation. Economists and policy makers expect recent price increases to be reflected in official data in the coming months.
European Central Bank Governor Christine Lagarde sees the rise in Europe as temporary, as central banks in Spain, Ireland and Sweden have recorded their highest alerts and inflation in 13 years. , The recent surge is wages.
“The effects of these factors should disappear … to weaken annual inflation over the next year,” Lagarde said.
Inflation in the euro area is expected to reach 4%, double the ECB’s target by the end of the year, and more and more economists expect to exceed the target throughout 2022.
Declining power supplies suggest a bleak winter outlook in some parts of the world.
Coal prices approach record highs as northern China cools, power plants stockpile to mitigate the energy crisis, and factory gate inflation in the world’s second-largest economy hits record highs in September for the first time in at least 25 years. I made it.
Meanwhile, Coal India, the world’s largest coal miner, said India had temporarily suspended supply to non-power users to combat one of the worst power shortages in history.
China’s power crisis, caused by a shortage of coal, soaring fuel prices and a surge in industrial demand after the pandemic, has shut down production at many factories, including the supply of major brands such as Apple (NASDAQ :).
While sluggish demand is curbing consumer inflation, policymakers are forced to walk a tightrope between supporting the economy and pushing producers’ prices even higher.
There are few signs of easing energy costs, and futures that are expected to drive higher prices to switch to oil to meet winter heating demand are above $ 84 a barrel.
The International Energy Agency said crunch could boost oil demand by 500,000 barrels (bpd) per day.
“Rising energy prices can increase inflationary pressures along with power outages, leading to lower industrial activity and slower economic recovery,” the IEA said in its monthly oil report.
In support of Reuters, top economies have lowered their joint forecast for growth in Germany, Europe’s largest economy, from 3.7% to 2.4% as supply bottlenecks hinder production. rice field.
In response to the crisis, the White House is discussing with US oil and gas producers to help reduce fuel costs, two sources familiar with the matter said.
The average US retail price of a gallon of gasoline is the highest in seven years, and the US Department of Energy expects fuel costs to skyrocket in the winter. Oil and gas production is below the country’s peak in 2019.
Chips are still down
Dutch navigation and digital mapping company TomTom warned that supply chain problems in the automotive sector could continue into 2022.
“We’ve underestimated supply chain issues, especially how big or big the semiconductor shortage has grown,” TomTom Chief Financial Officer Taco Titulaer told Reuters.
The global shortage of semiconductor chips has forced automakers to recover from the coronavirus turmoil and stop production again.
Italian-American automaker CNH Industrial (NYSE :) announced on Wednesday that it will temporarily close several European agricultural, commercial vehicle and powertrain manufacturing plants due to parts procurement problems.
However, the surge in demand is benefiting some people.
Taiwan’s TSMC, the world’s largest contract chip maker, reported a 14% increase in third-quarter profits.
TSMC and Taiwan are at the center of efforts to solve the global chip shortage that is also hitting smartphone, laptop and consumer electronics manufacturers.
Some companies like Toyota Motor (NYSE :) Corp is stepping up its efforts to resume production. Japanese automakers are hoping to recover shipments from pandemic suppliers in December, three sources told Reuters.
Reuters with the world economy caught in a complete storm
https://www.investing.com/news/stock-market-news/price-pinch-global-economy-caught-in-perfect-storm-2643591 Reuters with the world economy caught in a complete storm