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06.08.26 - 05:42
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End Of Cheap Food? Five Forces Set To Drive Grocery Bills Even Higher (ZeroHedge)
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End Of Cheap Food? Five Forces Set To Drive Grocery Bills Even Higher
UBS analysts identified five long-term forces likely to keep global food inflation "structurally higher" above its pre-pandemic average of about 2.5%, crushing consumer hopes that price pressures will simply fade.
"While food inflation globally has fallen from the COVID peak, a new debate is emerging: is the c2.5% LT average obsolete?" London-based managing director and equity-research analyst Sreedhar Mahamkali asked in a note penned on Monday.
Mahamkali and his team outlined five long-term drivers of global food inflation:
1. Climate risk is global, although its intensity differs by geography and commodity. Academic research suggests climate change could add around 0.9 to 3.2 percentage points to annual global food inflation by 2035.
2. Weak farm profitability limits investment and supply responsiveness globally. The pressure is most visible where farms are small, fragmented or exposed to volatile inpu...
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