Friday (2) is Good Friday, followed by the resurrection. However, the global economy may also have to go through a round of suffering before the resurrection! Influenced by the epidemic and other natural disasters, raw materials continue to rise in price, coupled with the Suez Canal boat jamming incident hand-tailed long, inflation has quietly arrived in relation to people’s livelihood. In addition to the familiar McDonald’s has increased prices, global consumer goods, food and feed, intelligent electronic products have been announced or are expected to increase prices one after another, which means that the central bank to raise interest rates may come early, is not a good sign.
Global raw material costs have been soaring recently, and the consumer goods industry has set off a wave of price increases! In addition to the mainland paper companies to raise prices in April, Huggies diapers and Scott paper towels manufacturer Kimberly-Clark (Kimberly-Clark) announced that from June, its products in the United States nearly the entire line of price increases, from infants, toddlers to adult care products, and even toilet paper, the rate of increase ranging from medium to high single-digit figures.
Many listed companies groan at rising costs
In January, Kimberly-Clark warned of price increases in pulp, recycled fiber and resin costs, which are estimated to cost between $450 million and $600 million this year, but CEO Michael Hsu said at the time that the company would not raise prices extensively. However, the global supply chain was hit again after the epidemic, especially after a cold front hit Texas in February, causing widespread power outages and shutting down a number of large local chemical plants, exacerbating raw material shortages and price increases, while ship owners and importers have warned of shipping delays and higher freight costs after the recent blockage of the Suez Canal.
A Kimberly spokesman said this week that the pricing plan in January was based on the outlook for commodity inflation at the time and that price increases were justified when the commodity environment turned bad.
The outbreak has heated up the “home economy” and boosted e-commerce business, making cartons in short supply, and prices have risen repeatedly.
In fact, dozens of publicly traded companies in the United States have issued warnings of rising inflation, including bottlenecks in the supply chain, rising raw material costs, and labor costs began to increase. Manufacturing giant 3M said that the cost of air and land freight elevated; retail giant Wal-Mart stressed that the U.S. ports are crowded; mobile home and home appliance manufacturers Legacy Homes and Williams-Sonoma both said that the cost of wages rose; toy maker Mattel said that the price of plastic rose; packagers Sealed Air bluntly said that All costs have risen.
More importantly, although the Suez Canal has resumed navigation in the early hours of March 30, it still continues to affect the China-Europe shipping trade routes, making the inflation situation worse. The latest mainland media quoted Shanghai Yangshan port terminal in charge of the whole April, China to Europe, the United States East of the container ship off shift (refers to the liner delay) will be very serious, the average time of each ship off shift will be in about 6 to 7 days. Logistics industry warned that the past lack of boxes (containers) of the plight will evolve into a lack of ships, April freight prices may re-rise because of the ship stuffing event.
Another industry revealed that COSCO Shipping (01199) of the Red Sea route in April all stop navigation, can no longer accept new bookings, has been shipped on the trailer to pick up boxes will also be pressed to port again ranging from 2 to 5 weeks. The industry expects that it may take at least a month to completely eliminate the impact of the canal stuffing incident, and shipping companies are challenged.
● Grain prices soar as corn futures reach new 8-year high
When it comes to inflation, you can’t help but care about food prices! The U.S. is expected to plant less grain area than expected this year, raising supply doubts and pushing up corn prices again, with futures surging to a new high of more than 8 years and soybean futures prices approaching a 7-year high. Market worries once these key feed agricultural products supply tension, will contribute to the global food prices continue to inflate.
According to the U.S. Department of Agriculture’s latest forecast, the total planted area of corn and soybeans for this year’s season, will be about 2 million acres less than originally expected, prompting corn May futures rose on Wednesday, Thursday still rose strongly 3.68%, once on $5.85 per bushel, the highest since 2013; soybean May futures had risen 1.36% to $14.5625 per bushel; wheat May futures also had the most rose 1.25 percent to $6.2575 per bushel.
More worryingly, if the USDA forecast is accurate, new supplies of grains for the next season will not be enough to cover stock depletion. The department said that as of March 1, soybean stocks had fallen to a five-year low, and corn stocks were reduced to a seven-year low. The authorities reported that farmers are cautious about expanding planting due to reduced demand in the past few years and frequent extreme weather events. Therefore, there are analyses that cereal prices must rise to a higher level in order to encourage farmers to expand planting area.
At the same time, the market fears that the Chinese market demand exceeds the U.S. planting volume. The analysis said that the mainland last year to the United States to purchase a large number of soybeans, is expected to remain strong this year. It is worth noting that the weather and other factors, the second phase of Brazil’s corn harvest outlook is poor.
Feed prices are rising, and meat prices are also rising, especially in the first quarter of the African swine fever epidemic hit the mainland again, resulting in a 20% drop in the number of pigs in the northern pig industry and soaring dairy pig prices. Some experts worry that swine fever may spread to the south. In the United States, the meat processor Hormel (Hormel) has announced in February to raise the selling price of turkeys to offset the rising prices of feed grains, while Cheerios cereal producer General Mills also said it would raise prices to make up for some of the freight and production costs, its chief executive Jeff Harmening said that competitors and retailers are experiencing the same Jeff Harmening, CEO of General Mills, said competitors and retailers are experiencing the same problem.
In addition, J.M Smucker recently raised the price of Jif peanut butter, also intends to raise the price of pet snacks, citing rising shipping costs and other inflationary pressures. CEO Mark Smucker said the price will only be raised if there is a significant increase in costs, and mentioned that retailers are starting to pass the price increase on to consumers, and the company will work with retailers to ensure the price is reasonable.
In the face of rising international food prices, the mainland has encouraged local governments and enterprises to increase grain reserves. Qin Yuyun, director of the Department of Grain Reserves of the National Food and Material Reserve Administration, said that the rise in international food prices this year was influenced by multiple factors, including the spread of epidemics around the world, drought in Southeast Asia, desert locusts and other crises. In the 14th Five-Year Plan (the 14th five-year plan) period, the mainland will focus on the construction of “digital grain storage”, accelerating the integration of 5G, artificial intelligence, big data and other technologies with the production, purchase and storage of grain, and building a national food and material reserve Data security center.
● Chip emergency electronic product users’ wallets are damaged
In the past, most of the protagonists leading inflation were oil prices, but today it is “chips”! As an essential place for soldiers, semiconductor supply shortage since the past half year, a number of chip industry chain manufacturers frequently rumored to increase prices, the cost will be passed on to downstream customers, and ultimately expected by consumers to “pay”. Due to the widespread use of chips, electronic products and even automotive manufacturing industry will be used, so the chip price increase is expected to set off a new round of widespread electronic product price increases, the potential to push up inflation.
TSMC, the world’s largest semiconductor foundry, is rumored to plan the end of this year to start canceling customer orders preferential, meaning that orders from next year to increase prices by a few percentage points, the reason is the cost increase, and after the mainland semiconductor foundry SMIC (00981) also announced a full-line price increase. Due to supply constraints, the chip and the core raw materials rose, has been on the line of the order to maintain the original price, has been placed and not on the line of the order will be implemented according to the new price.
Sources quoted by the media said that SMIC has raised prices in March, the price range varies from customer to customer, 8-inch and 12-inch wafer orders vary, the overall range of 15 to 30%. The relevant supply chain industry revealed that, due to chip shortages, earlier Taiwan’s UMC, TSMC and TSMC and many other foundries have increased prices, SMIC is considered a late move. In fact, before the chip shortage, the semiconductor foundry industry had a price cut to grab customers war and the offer will be low, profits are quite thin, and then see the capacity exceeds demand before they have to raise prices.
It is worth noting that TSMC usually gives preferential treatment to customers mainly engaged in smart phones and personal computers, such as Apple Inc. and Qualcomm. Therefore, the extremely popular consumer electronics products are inevitably price increases. Smartphone and Internet of Things (IoT) products manufacturer realme China President Xu Qi has taken the lead in revealing that cell phone prices may fluctuate in the second half of the year due to the shortage of raw materials such as chips, batteries and sleeves in the upstream of the cell phone supply chain.
Recent Comments