As much as I hate to rain on the deflation parade, I must point out that food inflation is increasing worldwide. It seems that food prices are unaware that they should be falling, because they are instead rising fast all around the world.
For example in India, after more than two months of steady decline, inflation has risen for the second week in a row due to a spike in food prices. The Economic Times reports that Indian inflation touches 5.64 pc with no respite as prices rise.
(emphasis mine)
“NEW DELHI: Costlier food items and a marginal increase in prices of decontrolled fuels pushed up inflation for the second week running even as economists stuck to their estimate of near zero inflation by the middle of 2009.
Government data showed inflation for the week ended January 17 at 5.64% against 5.6% in the previous week. The annual rate of year-on-year inflation was 4.45% in the corresponding week last year.”
RBC News reports the same story in Russia, as inflation creeps up.
"Russia's inflation amounted to 0.8 percent between January 20 and 26, 2009, and 2 percent for the year to date (compared to 2.2 percent for the same period of January 2008), the Federal State Statistics Service (Rosstat) reported today. In January 2008 as a whole, the inflation rate stood at 2.3 percent.
The rise in granulated sugar and tea prices contributed the most to the past week's inflation, reaching 6.5 percent and 1.2 percent, respectively. Meanwhile, prices for frozen fish, canned meat, rice, salt, and powdered baby milk increased 0.5-0.7 percent, whereas egg prices fell 1.3 percent and sunflower oil prices 0.8 percent. Fruit and vegetable prices rose 1.3 percent on average, while car gasoline and diesel fuel prices edged down 0.7 percent."
In Australia, Farm Online reports that fruit prices up 8pc, despite big CPI fall.
“Australian retail fruit and vegetable prices rose by 8pc in the December quarter, standing out against the overall falling price trend, which has resulted in the biggest slide in consumer prices (CPI) for 11 years.
Fruit and vegetables received special mention among the Australian Bureau of Statistics CPI figures for leading the few price rises, followed by takeaway food, which increased by 1.5pc.
Fruit's prominent role, especially, in leading the CPI statistics is likely to be to stir vigorous comment from many Australian fruit growers.
Stone-fruit growers recently have been claiming prices received for their fruit have fallen below cost of production.
They’ve been vocal in criticising the supermarkets for not paying enough for their fruit.”
In South Africa, the Business Day reports that food remains a worry despite falling CPIX.
“Measured by the target measure CPIX, consumer price inflation came in below market expectations at 10,3% in December, down from 12,1% in November and the recent peak of 13,6% in August. Transport inflation was sharply down, at only 2% year on year, from 13,3%, because of further cuts in the petrol price, which is now almost 50% down on its July peak. Food remains a worry, though.
