Food prices continue to rise
London Cocoa has hit a new 46 year high and NY Sugar a 12 year high as natural growing conditions change.
As food stuffs these have two inputs into food inflation, first as a raw material and then in the price of processed food on the shelves in our shops.
(Video Transcript)
Inflation
One of the areas of the market that remains of the big concern is inflation and food inflation particularly has been one of the things that people have been looking at and we've seen extra evidence recently to suggest that part of this is because of some of the elements added to foodstuffs that are distributed and sold around the world.
Cocoa
Now we've seen some gains for two areas of the market, both sugar and also cocoa. I want to show you cocoa first of all. This is the London cocoa market which is at a 46 year high. Now you can't go back that far on this chart but you can see this rapid rise that we've seen in the price of cocoa as an additive prices have been rising and causes of this are almost entirely natural. It is all about the fact that crops have been suffering because of weather, disrupted weather around the world and it's not just cocoa. There are a number of cocoa markets around the world. I want to show you that London one but it's also sugar as well.
Sugar
Now this does go back to some considerable time. You can see that in fact this chart from the IT platform New York Sugar No. 11 goes all the way back to the early 1980s and you can see this rise that we've got here on the right hand side takes us back to these levels. The highs occurred back in February 2011. So here we are now at levels that we've not seen since October 2011. So we're looking at 12 year highs for the price of New York sugar and we saw this market close out.
Yesterday's trade you can see above this prior line of resistance we've been looking at there which is the intraday high. In fact we have been higher than this intraday back on Tuesday the 5th of September this week but nonetheless this is a closing high that we've not seen in 12 years the price of New York sugar. One of the reasons why we continue to see food inflation around the world for foodstuffs that are sold in their end form which includes many additives like sugar.
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