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FTBagain

Inflation Hitting Profits

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http://newsvote.bbc.co.uk/1/hi/business/4420466.stm

Robert Wiseman Dairies has warned tough conditions mean it will have to review prices in the coming months.

In the past month alone, plastic prices had surged from £200 per tonne to £860 per tonne, Wiseman said.

Oil is the main ingredient in plastics production. Looks like second order price rises are starting to feed through from the high oil price.

http://newsvote.bbc.co.uk/1/hi/business/4420286.stm

Despite putting in what the firm said was a "solid performance", the high cost of fuel added £13m to its bills.

Looks like the up side risks to inflation are starting to build with ever greater vigor.

I wounder if the MPC are aware? <_<

Edited by FTBagain

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:ph34r: Industry info... ;)

this 200 to 800 is a little exaggeration

price have increase circa 40-50% accross the board...

These prices will filter onto the high street, it also gives some insight into the forsight of these companies, they seriously know that oil prices are not going to come down, until possibly 2008. Demand/supply is so high at the moment!

scary thought thou!...

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What's the matter with people in business nowadays?? You can just substitute other forms of packaging or transport, just like the bastardized CPI.

Time to get the tankers converted to pedal power and shipping milk in paper bags.

Maybe some bulls will wake up to why I have been posting seemingly irrelevant stuff on farming, I think this may well be the source of inflation that exceeeds anything predicted in general commentary to date - industrialized modern farming is highly mechanized, it is simply impossible to reduce costs further when raw materials, fertilizer and energy are rising. The farming industry will be decimated or prices will have to rise significantly.

Edited by OnlyMe

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The farming industry will be decimated or prices will have to rise significantly.

Prices will probably start to rise as farmers start going bust, reducing supply. Of course the third way would be to loose some weight! :lol::lol: I know I could do with loosing some! <_<:D

Edited by FTBagain

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FTBagain,

There is a job waiting for you in the pedal-powered tanker fleet. :lol:

Sadly as I am disabled I would not be much use peddling. Mind you I could always hook it up to the back of me wheelchair! :D But at my age I would not want to be stuck on the garage forecourt waiting for my tanker to arrive! :lol::lol:

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Sadly as I am disabled I would not be much use peddling. Mind you I could always hook it up to the back of me wheelchair! :D But at my age I would not want to be stuck on the garage forecourt waiting for my tanker to arrive! :lol::lol:

:lol:

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Prices will probably start to rise as farmers start going bust, reducing supply. Of course the third way would be to loose some weight! :lol::lol: I know I could do with loosing some! <_<:D

Fortunately agriculture doesn't follow normal economic rules:

fewer UK farmers = less pressure for price controls, tariffs and subsidies = less political pressure for protection = move towards world market pricing = sharp drop in price of food = weight gains all round

And, I know it's pedantic, and the internet is a great thing, but this loose/lose thing seems to be spreading like MRSA. At this rate our language will have degenerated into white noise within the next century or two

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Demand will not come down in 2008, you misunderstood my point, <_< (or I never explained it cleary enough:rolleyes: )

for the plastics industry in 2008, there will additional supply to the current industry due to more production facilities currently being developed by all the major suppliers (these huge facilities take a while to be completed as your would expect, and therefore wont effect supply until then).

This will drive the price down, simple supply and demand, so, there will be no reductions in raw material costs until around 2008 or later! But demand for oil will increase further from then anyway due to this increased need for oil, driving up costs further still, in other areas.

(plastics - makes up around 5% of current oil usage)

Read into it what you will, but demand for oil will not decrease for a long while yet. Long long time! :ph34r:

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FTBagain,

There is a job waiting for you in the pedal-powered tanker fleet. :lol:

We could go back to using sailing ships, they don't use much oil. For inland waterways, a horse can pull the barge. Plus the horse produces environmentally friendly fertilizer!

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And, I know it's pedantic, and the internet is a great thing, but this loose/lose thing seems to be spreading like MRSA. At this rate our language will have degenerated into white noise within the next century or two

Hear hear (or should that be here here?)

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Read into it what you will, but demand for oil will not decrease for a long while yet. Long long time!

Agreed. If the oil prices was going to fall back in a sustained way I suspect it would have started by now. If memory serves it fell back pretty quickly after the Gulf War in 1991. The difference this time is demand in India and China is growing steadily. I have said it before, but these two countries have huge populations of most of whom are very poor. That is huge pent growth potential.

India and China have kick started their economies by selling good and services to the West. Now they can go further by developing their own internal markets. That will drive demand for oil for quite sometime yet. Inflation is back, to what extent is not clear yet, but I suspect it is heading up to high single figgers if unchecked. If checked IR are on the way up big time.

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FTBagain.

Quite, Chinese growth has just been re-estimated upwards again - something like 8/9% if I remember correctly. Just how much can existing industrialized (or shold that be comercialized economies reduce their consumption - very little by the looks of things in the short term).

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Agreed. If the oil prices was going to fall back in a sustained way I suspect it would have started by now. If memory serves it fell back pretty quickly after the Gulf War in 1991. The difference this time is demand in India and China is growing steadily. I have said it before, but these two countries have huge populations of most of whom are very poor. That is huge pent growth potential.

India and China have kick started their economies by selling good and services to the West. Now they can go further by developing their own internal markets. That will drive demand for oil for quite sometime yet. Inflation is back, to what extent is not clear yet, but I suspect it is heading up to high single figgers if unchecked. If checked IR are on the way up big time.

{BoredtrainBuilder bangs head on wall}

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Fortunately agriculture doesn't follow normal economic rules:

fewer UK farmers = less pressure for price controls, tariffs and subsidies = less political pressure for protection = move towards world market pricing = sharp drop in price of food = weight gains all round

And, I know it's pedantic, and the internet is a great thing, but this loose/lose thing seems to be spreading like MRSA. At this rate our language will have degenerated into white noise within the next century or two

BTB, It is one way it could pan out, there is also a totally opposite direction in which it could go, transportation costs are the a main driver.

The pressure mounts

North Sea oil production has 'peaked' and is now declining. The same will happen soon to global supplies. John Vidal and Ian Sample examine the potential consequences of a worldwide shortage of fossil fuels

The price of a barrel of North Sea crude is now over $60 (£34), and it is thought unlikely to fall; UK production in all offshore fields is 30% down on 1999 and dropping daily; and governments, major oil companies and energy analysts accept that, barring a few spikes, North Sea output will probably fall every year from now until the resource becomes physically too difficult to extract - perhaps in 20 years' time

......

Food crisis

Any oil shortage would, says Tim Lang, professor of food policy at City University, effectively cause the collapse of the whole British supermarket system. The slick operation, which depends on air freight, tens of thousands of lorries, giant distribution points, intensive farming and out of season production, around the world, depends from start to finish on oil. Were prices to rise dramatically, the system would, he says, show its fragility.

What is badly needed to avert a future collapse, he says, is a plan B. "Food today travels further to our shores and further on our roads to reach supermarkets further from our homes than ever before. The result is a finely-honed system that is woefully vulnerable to oil prices.

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Sailing ship are already making a come back in the cruise ship business, and i am not just talking about Sail Training Ships. These are full on luxury liners. I saw one in the Canary Islands when it was brand new, back 2002 (I think). Very big by sailing ship standards, and she was not the only one cruising around the Canary's.

I also remember back in the late 80's a chap from the UK using sail power to cut fuel consumption on a coastal freighter in the Caribbean, but I think he must have gone bust.

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(plastics - makes up around 5% of current oil usage)

I'm not sure that the relative amount of oil used in plastic is relevant to inflation pressures.

Would an increase of prices in the range of products with plastic have more impact on inflation than the other uses of oil?

I would guess so and that these increases (second round) would scare central bankers more than increases in fuel prices that can be explained away.

Edited by Starcrossed

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Surely this will result in indebted consumers buying even less / being even more overstretched?

Yes! As volumes fall there will come a point where the retailers will put up prices in an effort to get as much out of the few remaining customers, thus pushing up inflation. Remember inflation takes no account of sales volumes, only prices.

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Fortunately agriculture doesn't follow normal economic rules:

fewer UK farmers = less pressure for price controls, tariffs and subsidies = less political pressure for protection = move towards world market pricing = sharp drop in price of food = weight gains all round

And, I know it's pedantic, and the internet is a great thing, but this loose/lose thing seems to be spreading like MRSA. At this rate our language will have degenerated into white noise within the next century or two

There there BTB, there trying hard not to loose track off there fought's.

You are to senzitive but they could learn of off you.

:)

I am of course with you, but it is, I fear, a losing battle.

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I'm not sure that the relative amount of oil used in plastic is relevant to inflation pressures.

Would an increase of prices in the range of products with plastic have more impact on inflation than the other uses of oil?

I would guess so and that these increases (second round) would scare central bankers more than increases in fuel prices that can be explained away.

basically thats my point.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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