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Your Food Prices Are at Risk as the World Runs Short of Workers… Across the world, a dearth of workers is shaking up food supply chains.

“In Vietnam, the army is assisting with the rice harvest. In the U.K., farmers are dumping milk because there are no truckers to collect it. Brazil’s robusta coffee beans took 120 days to reap this year, rather than the usual 90. And American meatpackers are trying to lure new employees with Apple Watches while fast-food chains raise the prices of burgers and burritos.

“Whether it’s fruit pickers, slaughterhouse workers, truckers, warehouse operators, chefs or waiters, the global food ecosystem is buckling due to a shortage of staff. Supplies are getting hit and some employers are forced to raise wages at a double-digit pace.

“That’s threatening to push food prices — already heated by soaring commodities and freight costs — even higher. Prices in August were up 33% from the same month last year, according to an index compiled by the United Nations’ Food and Agriculture Organization.”

https://www.bloomberg.com/news/features/2021-09-02/food-prices-driven-up-by-global-worker-shortage-brexit


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Global Food Costs Jump Back Near Decade-High on Harvest Woes… reviving concerns about inflationary pressures

“The advance was driven by reduced grain production expectations, frosts that hurt sugar-cane crops in top grower Brazil and tightening oilseed supplies, the UN’s Food and Agriculture Organization said Thursday.”

https://www.bloomberg.com/news/articles/2021-09-02/global-food-prices-jump-back-near-decade-high-on-harvest-woes


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Global supply squeeze and Delta virus rip through factories Orders at factories are piling up as companies around the world struggle to meet demand amid a damaging mixture of the coronavirus and widespread bottlenecks in supply chains…

In Europe, unfilled orders rose to an unprecedented level in August, according to an IHS Markit survey of purchasing managers.”

https://www.livemint.com/industry/manufacturing/global-supply-squeeze-and-delta-virus-rip-through-factories-11630505546316.html


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There’s a ‘meltdown of container shipping market’ coming as cargo piles up.

“GSF director James Hookham said shippers faced a “meltdown” of the container shipping market – “rates in the stratosphere, slots up for auction and service performance in the trash”.”

https://theloadstar.com/theres-a-meltdown-of-container-shipping-market-coming-as-cargo-piles-up/


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Strikes at Korea’s global shipping giant threaten supply chain ‘turmoil’…

“One of Asia’s biggest shipping companies is facing the threat of imminent worker strikes, risking further disruption to global supply chains that are already battling surging costs and shortages of containers and computer chips.”

https://www.ft.com/content/a0ae694b-9b4f-4601-90c1-4bd974e89950


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General Motors shuts eight plants amid supply shortages.

“Vehicle manufacturer General Motors will shut down most of its North American plants in September as the semi-conductor chip shortage continues to bite.”

https://www.cityam.com/general-motors-shuts-plants/


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Hurricane Ida could make the supply chain disaster even worse…

“… the hurricane’s damage to critical industries in the Gulf Coast area and the urgent need to rebuild are expected to cascade through the country’s already strained shipping infrastructure.”

https://www.nytimes.com/2021/08/31/business/hurricane-ida-supply-chain-shortages.html


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As The Delta Variant Soars, The Airline Industry Descends Into Another Slump.

“The EU is taking the U.S. off its COVID-19 “safe list,” but airlines have already been cutting flights due to low booking rates. Some say vaccines should have been required for travel months ago.”

https://www.npr.org/2021/09/02/1033727672/as-the-delta-variant-soars-the-airline-industry-descends-into-another-slump


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Britain’s trucker shortage jams post-pandemic recovery.

“Two furloughed jumbo jet pilots and a burnt-out finance worker have been among the more unusual candidates to learn how to drive 44-tonne trucks at Laurence Bolton’s school in south London during the pandemic.”

https://www.reuters.com/article/britain-economy-shortages-insight/britains-trucker-shortage-jams-post-pandemic-recovery-idUSKBN2FZ0D5


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London hit with MDMA drought due to shortage of lorry drivers…

“The wider drugs trade is thought to have been hit hard by the two issues [Covid and Brexit] for a number of months, but a recent reduction in Heavy Goods Vehicles (HGVs) transporting items across the UK is affecting supplies of some illegal substances.”

https://metro.co.uk/2021/09/02/london-hit-with-mdma-drought-because-of-shortage-of-lorry-drivers-15195979/


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China’s August services activity slumps into contraction- Caixin PMI.

“Activity in China’s services sector slumped into sharp contraction in August, a private survey showed on Friday, as restrictions to curb the COVID-19 Delta variant threatened to derail the recovery in the world’s second-biggest economy.”

https://www.reuters.com/article/china-economy-pmi/chinas-august-services-activity-slumps-into-contraction-caixin-pmi-idUSZRN002Q01


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Evergrande bond trading halted on growing fears of cash crunch…

“Trading in some debt issued by China Evergrande was temporarily halted on Friday, as the under-pressure property developer’s bonds tumbled to new lows on fears of a deepening liquidity crisis.”

https://www.ft.com/content/b4e2b0be-733d-41e5-991b-a3d40e8da31b


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China’s Conflicting Climate and Economic Goals Roil Commodities. China’s efforts to thread the needle between an often conflicting array of environmental, economic, social and geopolitical objectives are playing out in increasingly unpredictable global commodity markets.

“The world’s biggest consumer of raw materials, and a major producer of some of them, is attempting to curb carbon emissions and conserve electricity, while at the same time preserving economic growth.”

https://www.bloomberg.com/news/articles/2021-09-02/china-s-conflicting-climate-and-economic-goals-roil-commodities


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Emerging economies stymied by rising interest rates and COVID…

“…fear is once again on the rise. As inflation increases in the United States, the Federal Reserve could raise its interest rates in the foreseeable future. “For emerging markets, there is then a risk of a sharp rise in the cost of capital and a flight of capital,” Clemens Fuest, head of the Munich-based Ifo Institute, told DW.”

https://www.dw.com/en/emerging-economies-stymied-by-rising-interest-rates-and-covid/a-59037119


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COVID-19 Pandemic Devastates Argentina’s Economy… Argentina was already two years into a recession when the first cases of the coronavirus were detected.”

[Video]

https://america.cgtn.com/2021/09/01/covid-19-pandemic-devastates-argentinas-economy


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Crude output in Venezuela’s key Orinoco oil belt plunged by a quarter to less than 300,000 barrels per day (bpd) in August due to a shortage of diluents needed to blend with the region’s extra-heavy crude, documents seen by Reuters showed.

“The drop comes as state oil company PDVSA directs more medium and light crudes to refining to boost supplies of scarce motor fuel in the crisis-stricken OPEC nation, leaving little to dilute the Orinoco’s tar-like crude into exportable grades.”

⁠https://www.reuters.com/business/energy/venezuela-crude-output-key-region-plunges-due-diluent-shortage-2021-09-01/⁠


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Guns, drugs, jobs. In these Venezuelan towns, Colombian rebels call the shots…

“The Colombian government has long claimed Venezuela’s leadership grants safe harbor to anti-government Colombian rebels, and that Caracas allows cocaine to move through its territory for a cut of the profits.”

https://www.reuters.com/world/americas/guns-drugs-jobs-these-venezuelan-towns-colombian-rebels-call-shots-2021-09-02/


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Brazil soy farmers hoard crops, betting prices will rise.

“Brazilian soybean farmers are keeping their crops instead of selling them because they expect prices to rise further as global supplies tighten, according to brokers, buyers and sellers in the world’s largest producer and exporter of the oilseed.”

https://www.reuters.com/article/brazil-soy-idUSL1N2Q11DN


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As Kenyans Starve, Cabinet Delays Meeting on Drought and Famine.

“The Cabinet will meet on Tuesday next week to discuss how to help starving Kenyans as drought continues to ravage many parts of the country. One of the measures being considered is the purchasing of livestock from pastoralists in areas hit hardest by food shortages.”

https://allafrica.com/stories/202109030068.html


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[North Korea’s] Kim Jong Un warns on ‘abnormal climate,’ orders land overhaul.

“North Korean leader Kim Jong Un urged party officials to look into massive land projects after flooding from an “abnormal climate” over the past few years has helped push his state into one of its worst food shortages under his rule.”

https://www.hindustantimes.com/world-news/kim-jong-un-warns-on-abnormal-climate-orders-land-overhaul-101630632771167.html


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Starving North Koreans are kidnapping the children of wealthy families and demanding ransoms so they can afford to eat.

“There have been recent reports of starvation in remote parts of the country as industry and agriculture have largely ground to a halt from a lack of fuel and spare parts. There are also widespread reports of pilfering, even among the poorly-fed conscripts who make up the bulk of the country’s army, and civilians are also becoming more desperate.”

https://www.dailymail.co.uk/news/article-9950311/Starving-North-Koreans-kidnapping-children-wealthy-families-ransom.html


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The World Is Awash in Dollar Liquidity That No One Wants…

“Extraordinary measures from central banks, including the massive provision of liquidity from the Federal Reserve in the form of dollar swap lines and new repo facilities, mean the financial system is essentially swimming in cash.”

https://www.bloomberg.com/news/articles/2021-09-02/the-world-is-awash-in-dollar-liquidity-that-no-one-wants


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How Fear Is Driving Global Currency Markets…

“Adam Cole, who’s been monitoring economies and currencies for three decades, uncovers what’s going on: since the pandemic struck, currencies are basically moving based on the magnitude of fear in markets on any given day… The opposite happens when risk appears to recede.”

https://www.bloomberg.com/news/newsletters/2021-09-02/what-s-happening-in-the-world-economy-fear-is-driving-global-currency-markets


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Extreme Weather and Consumer Inflation.

“From droughts in Canada to a frost in Brazil, weather events are getting more extreme, and that’s impacting consumer prices.”

[Video]

https://www.bloomberg.com/news/videos/2021-09-02/extreme-weather-and-consumer-inflation-video


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Could climate change trigger a financial crisis?

I’m not going to quote from the article as it is academia divorced from reality and totally downplays the risks IMO. In short, the answer is quite obviously, “Yes”. The financial system is already near its elastic limit and climate change is an additional and ever worsening stressor on it.

Picture is from NY btw. Fatalities from Ida in the northeast now at 45.

https://www.economist.com/finance-and-economics/2021/09/04/could-climate-change-trigger-a-financial-crisis


You can read the previous ‘Economic’ thread here. I’ll be back over the weekend with a ‘Climate’ thread.

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