More Bad News on Inflation

With bakeries in Singapore reportedly raising prices for their products due to the sharp rise in the price of sugar, there is now more bad news as Bloomberg reports that cooking oils are poised to see price increases as record demand has brought inventories down to 17-year lows.

"Inventories of soybean oil and palm oil, used by Nestle SA and Unilever and in everything from Hellmann’s mayonnaise to Snickers candy bars, will drop 12 percent in the coming year as China and India increase consumption 11 percent, U.S. Department of Agriculture data show. Food prices climbed in September to the highest level since the crisis in 2008 that sparked riots from Haiti to Egypt, the United Nations says."

Indeed, China and India will be the prime drivers of demand for agricultural commodities for years to come.