Posted by Rich Sweeney on May 15, 2008
- Ajay Shah has a nice, thorough post on what’s going on with food prices, debunking several common explanations and putting forth a reasonable, if unsexy, story of his own.
- Paul Kedrosky challenges the conventional wisdom that OPEC always prefers high oil prices. Persistent, predictably high oil prices would encourage people to switch to alternatives. Instead, he argues that what OPEC prefers is a series of high prices, unpredictably interspersed with periods of very low prices. Saudi Arabia’s role in curbing excessively high OPEC prices has been pretty well documented. It’d be interesting to see any evidence that the Saudi’s actually undercut price with the deliberate intention of warding off substitutes.
- Finally last week’s Economist has a briefing on energy efficiency. Overall I found the piece a bit elementary and far too dependent on the McKinsey report. Nevertheless, it’s a good intro for readers who are new to the topic.
H/T to Thom for the first two links.
Posted in Commodities Markets, Efficiency, Oil | No Comments »
Posted by Rich Sweeney on April 10, 2008
More on food prices. From the inbox:
BLS data say that food prices are increasing on the order of 3.5-4.5% with grain prices up only about 6.6%, but commodity prices for grains have skyrocketed. Any idea why there is a difference? Even the local bakery in Ithaca has a per loaf bread charge that tracks prices of flour and other grains and is updated weekly, so it doesn’t seem like it should take much time for commodity prices to hit consumers.
My response was basically, “I got nothin”. Then another friend directed me to this article from last week’s NYTimes, which at least let me know that I’m not the only one clueless here. Basically futures and cash market prices for wheat and soybeans have been all out of whack for some time now and nobody knows what the eff is goin on. As Scott Irwin of Illinois says in the article, “These are highly competitive markets with very experienced traders. Yet they are leaving these profits alone? It just doesn’t make sense.”
Any smartypants CT readers care to put forth an explanation?
Posted in Commodities Markets | 4 Comments »
