Rise in wheat prices and raw material costs fuels stagflation worries

Описание: 세계 원자재·식품 가격 급등에 스태그플레이션 우려

The cost of wheat and raw materials like plastics, metals and fuel have all risen recently mostly due to the Russia-Ukraine conflict.
Consumers are scaling back their spending in response to the high prices, and experts worry that this may push the economy into a recession.
Kim Yeon-seung reports.
Food prices have risen beyond what many can afford.
According to the Korea Rural Economic Institute's overseas grain market information, wheat futures on the Chicago Board of Trade as of March 25th have risen 43 percent since the end of last year to 405 U.S. dollars a ton.
The skyrocketing prices have left many local bakeries and eateries worrying about their livelihoods.
The Russia-Ukraine conflict has been the driving force behind the rise in prices, with those two countries seen as the world's breadbasket, providing almost 30 percent of global wheat exports.
But it's not just the price of this pivotal grain that has seen a rise due to the war.
The prices of fuel, plastics, and metals have also soared.
This has forced consumers to scale back their spending.
According to Bloomberg, companies worldwide are cutting back their operations due to rising costs of energy and consumers are squeezing out discretionary spending- like dining out or buying luxury goods.
One expert says that if this trend grows, the world could tip into stagflation.

"With a lot of liquidity out in the markets, wages have risen, and with the crisis in Ukraine, raw material costs and fuel costs could keep rising for a while. If inflation worsens, people might continue to buy less and the economy might see stagflation."

The worsening situation is affecting Korean manufacturers as well.
According to the Federation of Korean Industries on Monday, one out of three Korean manufacturing exporters have suffered a blow to their funds compared to 2021.
Their survey shows that 37-point-5 percent of them said that their situation has worsened due to the rise in costs, including materials and labor expenses.
Kim Yeon-seung, Arirang News

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2022-03-28, 17:00 (KST)