Friday, Sep 28, 2007
Who knew trading sugar could be so difficult
FT.com: Tate & Lyle plunges on fresh profits alert
.. or is it that raw material or commodity inflation is first hammering the profit margins and will then have to be passed onwards (unless companies like to do these things as a charitable service.. some shareholders must be thinking it is at the moment).
Posted by whiteknight @ 12:47 PM (518 views) Add Comment
5 Comments
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1. whiteknight said...
These must be considered really stable, solid chip companies.
It makes me ask questions about where the pension funds are invested.
Normally in the wrong place.(?)
2. shipbuilder said...
This is the big test for CPI - rising commodity prices have been headline news for months now. Apparently there was a 'no pasta' day in Italy recently to protest against rising wheat prices. If CPI can fall by 0.5% or whatever because there was a bit of rain and clothes retailers had a few more sales, then for these food/oil etc. prices not to translate into CPI skyrocketing later this year would be a national scandal.
CPI has become the headline statistic for the performance of the economy, so I find it incredible that potentially the ONS could change the basket again and reduce the influence of oil and food to fiddle the figures. It also surely makes the figure incomparable with the same figure from even a year ago.
It now surely cannot be denied in any way that inflation is heading for the sky - but will the headline statistic reflect that?
3. planning4acrash said...
The interesting thing is to look at the divergence between CPI and RPI. This will become embaracing and you will get second round wage led inflation if RPI gets too high.
http://www.statistics.gov.uk/cci/nugget.asp?id=19
I always suspected that producers would assume that commodity prices were up as a short term blip and that they would avoid passing on costs until later on, given that we have been used to low inflation for a while. So I would imagine that inflation will start a sudden upwards movement sometime in the next year when this kind of thing happens.
4. harold said...
One lump or none?
5. lvmreader said...
Wait until the pound looks like devaluing. I hope they have a currency hedge.