Inflation in Mexico rebounded during the first fortnight of this month, moderately, but marked a different trend than that recorded in recent months, practically all of this year.
According to official figures, the inflation rate in the period was 0.63 percent, which is the highest biweekly inflation since November 2021.
At an annual rate, inflation stood at 4.32 percent, above the previous 4.27 percent.
Increase in food merchandise
The relevance of the inflation data published on Tuesday consists of that food prices are rising againmarking a trend different from that of other products and services.
According to Banco Base, within the measurement of merchandise inflation, there were more food items that rebounded during the last fortnight, advancing 0.27 percent, compared to the rate of 0.18 percent reported in the same period in October.
The pressure on food commodities is a bad sign for the central bank, due to its volatility; That is, there can be little or no impact on the performance of their prices.
But, it is even riskier because many of these prices have components associated with external factors; that is, with little internal control.
The products that reported the greatest increase were electricity, with a variation of 22.26 percent, and green tomatoes, with 18.83 percent.
Global trend
Price pressures on food commodities are global and it seems that they will not stop in the short term, especially on the side of grains and products of animal origin.
A World Bank report warns how food inflation is advancing more than general inflation in most countries in the worldconfirming a worrying trend for central banks because the causes of this rebound are associated with factors such as the climate and, especially, phenomena such as “el Niño”, as well as geopolitics, in the face of which there is not much to do .
According to the World Bankfood prices rise above general inflation in practically 80 percent of countries of the world.
In its monthly update of the Food Security Report, the organization pointed out that there are nations such as Argentina and Venezuela that even register triple-digit increases and others with double digits, as is the case of Egypt, Nigeria and Pakistan.
Additionallybetween 60 and 80 percent of the poorest or developing countries have experienced food price increases of more than 5 percent and up to 10 percentonly this year.
But developed countries are not spared either, according to the World Bank, in 64 percent of these countries the price of food increases more than general inflation.
The World Bank also warns about the performance of prices of two essential products in humanity’s diet.
In the annual measurement, corn prices have increased 28 percent until October of this year and wheat prices have increased 35 percent. Rice, a food that is also a staple in many countries, increased 39 percent annually.
Although corn and wheat prices remain below the highs recorded in January 2021, when the Covid-19 pandemic and the end of lockdowns disrupted global supply chains, rice prices remain 19 percent more expensive than in January 2021.
The El Niño phenomenon is definitely one of the factors that trigger the increase in prices, since it influences the increase or decrease in rainfall and, therefore, agriculture.
El Niño tends to reach its peak between October and February, but it has already influenced the high temperatures reached in August and September in countries such as Argentina, Bolivia, Brazil and Paraguay, the agency recalled.
The World Bank is also concerned about the food situation in East Africa, especially in Ethiopia, Somalia, Sudan and South Sudan.
According to their figures, a total of 62 million people in these countries are at risk of food insecurity in the next six months.
And war or geopolitical conflicts definitely play their role in this global increase in food commodities; For example, in the Gaza Strip, 63 percent of the population was already food insecure before the outbreak of the war between Israel and Hamas.
Without forgetting the Russia-Ukraine conflict, which has caused serious trauma in global agricultural markets due to the risk of grain shortages in Europe and other parts of the world.
It is a fact that inflationary pressures on food have become a global phenomenon, bad news for the Bank of Mexico and for all central banks in general.
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