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Date Posted: 13:28:14 09/01/09 Tue
Author: Anna May
Subject: Monday's article about sugar

This is another two part article, next week hope to explain why I think the US and Ca. might be headed for hyperinflation. Hope you enjoy this, take care, Anna May

Will sugar shortage trigger hyperinflation?


Every morning I start off my day by going to a variety of newspapers from around the world, being obsessed with keeping up with what’s going on with anything having to do with agriculture, trends, crop failure and successes are the first to grab my attention. In 2000, when I first wrote about the possibility of a worldwide grain shortage, some people thought me a fear monger. Now, after this shortage finally caught up with us and the price we pay for bread, oil and everything made from grain has increased drastically, people are realize that they can’t take the price of anything for granted.

We only have to make a quick trip down the grocery isle to see how ‘food’ inflation has been passed down to the consumer. When a government measures over all inflation, the figures can be rather unrealistic. Say the price of shoes is stable, and the price of electronics has declined for a certain period, even though sugar, flour, and all grain products have climbed by say 40%, the government figures for inflation during a given period of time could reflect the stable things in the economy, which would show less inflation, and even a decline.

Now putting this into perspective, we all need to eat, have running water, electricity and other essentials, but we all don’t need the BEST shoes, clothes or diamond rings on our fingers, yet all of these things are part of the overall inflation ratio. I think we consumers should do what I’ve been doing for years, writing down the price in large print on things, then as they go up, you can tell just what percentage more you are paying for an item. If a loaf of raisin bread cost $1.75 last year and it now $3.50 most people do not realize that is a 100% increase.

Every week people go through their normal routine, working nine to five with a bit of home life tucked in there at the end of the day, shopping on either Thursday or Friday night and listening to the news, reading the paper when they can find some extra time. These days the rat race is just that, trying to earn enough to pay constantly raising taxes, oil, gas and food prices is making survival the main thing most low and medium income families are doing, so it’s no surprise that most of us can’t take the time to research the things that will tell us that things are NOT getting better and in fact the economic crises is and will get much worse as a result of this year’s crop failures.

Cheap meat now, extremes later
All spring I listened to CBC tell how the farmers out west kept replanting grain, they did that so many time that many of them ran out of seed. The rain did not come: the grain and hay did not grow. Now facing extremely high prices for the hay and grain needed to winter over each head of cattle, these fine people are being forced to sell off their livestock at low prices, taking a loss now will put many cattle men out of business, and shorten the time before ONLY big agri-farms are able to keep their heads above water. (Another story).

Just this week all stores in the Sherbrooke area offered amazingly low prices on boneless beef. I bet most people bought a roast or two, but unless you have a freezer, know how to can meat or smoke it for later use, these low prices now only mean that by next year there will be less bred cattle, producing less beef and causing the price of beef to soar. Last year you could get medium ground beef for $2.50 lb, this year it’s holding at $2.99 lb. for now, that’s a 20% increase, by next summer we could be looking at $3.50 lb. medium ground beef OR even higher.

Everyday I’m asked what I think is going to happen concerning food prices, and to be honest with you, I think that the sugar shortage is only at its beginning and with this year’s failed crops in both India and Brazil sugar could be catalyst that triggers hyperinflation here in North America.

Let’s have a quick look at what’s happening around the world. India, the second largest sugar producer, because of extreme draught has a projected production of 14 million tons this year, seeing that maybe the biggest sugar consumers in the world averaging a consumption of 22 million tons a year, the shortfall will be taken from the world’s supply of sugar.

On another continent, Brazil the world’s number one sugar producer has faced excessive rain, harvesting less sugar than expected. Brazil is a major sugar contributor to the making of ethanol, and experts believe it prefer selling much of its sugar to India where it would fetch a better price than it would going for ethanol. Other researchers from Germany have also predicted lower than normal outputs for Mexico, Thailand and Pakistan. But no matter how we look at this the International Sugar Organization has said that the world sugar supplies will be short some 8 million tons this year and with those numbers there is now where for the price of sugar to go but UP. Right now sugar is the highest price it has been since Jimmy Cater was president.

The rise of sugar
On a world market the rise of sugar is rather like the domino affect. Less sugar means ethanol makers turn to corn and other grains to meet the need. This causes the price of grains to climb, thus all animals that need grain to grow or produce milk and eggs also costs more. Grains like corn, soy and canola used to make oil all rise, flour rises causing another jump in bread prices. People say IF you have a sweet tooth it might mean paying a nickel extra for a candy bar, but this is not the issue. Read the labels of the things you eat and shockingly you’ll find sugar as an ingredient in most things on the grocery shelf.

So, everything you eat will eventually be affected. In the last year I’ve watched the jam I bought on sale go from 2 jars for $5, to a sale price of $3.69 a jar. That’s an increase of $1.19 a jar. That’s no small amount and before the sugar prices even started going up. These increase were because of the increases in raw materials used for packaging, in this case glass jars, higher prices of fruit, manufacturing and transportation.
The End

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