Those who are at the forefront of world trade have no doubts: across the planet, prices are skyrocketing. “Don’t listen to what everyone is saying, the prices will go up, it’s inevitable”, says Peter Wilson, managing director of Cory Brothers, a British company that facilitates imports and exports. The most obvious is the cost of transporting a container. “A year ago, between China and Europe, it cost 1,800 dollars [environ 1 500 euros]. Today, it is around 10,000 dollars ”, explains Wilson.
The hyperinflation of freight transport is coupled with the sharp rise in raw materials. The price of copper broke a new all-time high at the beginning of May, exceeding the threshold of 10,200 dollars per tonne. The price of a barrel of oil has doubled in a year, now around $ 65. Iron has reached its all-time high. Wood, aluminum, soya… Everything is on fire.
The reason for this is the much stronger-than-expected upturn in demand, now that countries are opening up one after the other thanks to the progressing vaccination programs. Opposite, the offer is still deeply disorganized by the Covid-19 pandemic: factories that sometimes idle because of physical distancing, maritime traffic almost stopped in India because of the outbreak of Covid-19 cases, difficulty to anticipate orders, which arrive in spurts …
“Shared increases”
This inflation in trade and commodities is starting to translate into a real surge in inflation. In the United States, consumer prices rose 4.2% over one year in April. This is its highest level since 2008. In the euro zone, where the economy is only at the start of a post-pandemic reopening, the effect remains more limited, with inflation of 1.3% over a period of year in March. Yet the change is striking.
In October 2020, economists were worried about the risk of a deflationary spiral in the euro zone, the price index then being at -0.3%. Today, no one evokes such a scenario. Some countries are more affected: Germany, Austria and Luxembourg are now above 2%. France is at 1.4%.
Among economists, there is a consensus: this increase will increase in the coming months. Capital Economics is forecasting a peak of 3.5% in Germany in the fall, for example. Gradually, producers will be forced to pass the rising prices of transport and raw materials to their customers. “No one can absorb price increases of this level on their own, says John Newcomb of the UK Hardware Stores Federation (BMF). It’s going to be shared between the buyer, the seller, the construction companies and the customers. “
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