A perfect storm creates price spike in global commodities
A cafe patron pours sugar into a cup.
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JEREMY HOBSON: Well the cyclone that hit Australia yesterday and damaged sugar crops has sent sugar prices to a 30 year high. Meanwhile wheat prices are at historic highs, thanks to the unrest in Egypt, the world's largest wheat importer. And if that's not enough -- the UN's food price index hit a record last month.
For more on all this, let's bring in Kevin Kerr of Kerr Global Commodities Watch. Good morning.
KEVIN KERR: Good morning.
HOBSON: So, will consumers notice these price spikes in the things that they buy, and if so, when?
KERR: Consumers are going to be going down the grocery aisle, and they're going to realize that 10 to 20 cents on the dollar they're going to see increases in things like soda, and other things that are dependent on sugar almost immediately. You know, the producers are going to pass this cost almost immediately to consumers.
HOBSON: And Kevin Kerr, is this just a bunch of coincidences? I mean, wheat prices going up because of what's going on in Egypt, sugar prices going up because of the cyclone that hit Australia. Is it just a bunch of coincidences or is there something larger going on here?
KERR: Well, it really is a perfect storm. You know we have all of this civil unrest happening. At the same time we have inflation creeping in globally. And of course more demand. So we are seeing everything kind of come together at once and unfortunately for the consumer, which is already struggling, these prices are creeping up very very quickly. And in some places faster than others. And that's also partly responsible for the civil unrest we're seeing in many of these countries already.
HOBSON: Kevin Kerr, of Kerr Global Commodities Watch. Thanks so much for your time this morning.
KERR: Thank you.