The seaports are congested, the price of goods has skyrocketed globally

According to Bloomberg , shipments from US ports are witnessing a period of stagnation increasing sharply. Meanwhile, the backlog of container ships anchored near Singapore was 10.5 percentage points higher than normal.

This contributed to pushing up global food prices, as well as wide-ranging inflation.

In the US, the US Federal Reserve (FED) announced that it will begin to cut its bond-buying programs to stimulate the economy. The central banks of the Czech Republic and Poland also raised interest rates to combat rising inflation.

 

Even as the economy shows signs of slowing growth, international trade is still experiencing unprecedented congestion. Photo: Reuters.

 

Even as the economy shows signs of slowing growth, international trade is still experiencing unprecedented congestion. Photo: Reuters .

Inflationary pressure

Bloomberg reported that currently global fertilizer prices are increasing rapidly. The reason is the rising cost of natural gas, forcing some production plants in Europe to suspend or cut output.

The price increase has raised concerns that farmers will cut production, or switch to crops that need less nutrients. Falling yields could push up crop prices, further exacerbating food inflation.

Shipments from US ports are seeing a sharp increase in useless time. It's a sign that supply chain bottlenecks have disrupted US shipping hubs. Truck downtime has increased from 17 hours in 2019, 21.5 hours in 2020 to more than one day.

The Czech Republic's central bank raised borrowing costs by 125 basis points to 2.75% - the highest level in nearly 25 years. Poland's central bank governor also pledged to do "whatever is necessary" after raising the benchmark interest rate by 75 basis points to 1.25%.

 

Food prices in China saw a weekly increase in October. Photo: Reuters.

Food prices in China saw a weekly increase in October. Photo: Reuters .

Meanwhile, the Bank of England kept interest rates unchanged. Norway also confirmed that it is preparing to raise interest rates at the end of the year.

In China, the new Covid-19 outbreak has spread to 19 of the 31 provinces. This is the widest spread that Beijing has faced since quelling the outbreak in Wuhan at the end of 2019.

The new, more contagious variant forced Beijing to take drastic measures to deal with the virus. This caused the world's second economy to wobble.

Traffic network is overloaded

Recently, Beijing urged local governments to ensure enough food supplies during the winter and encouraged residents to stock up on some essentials.

According to data from the Ministry of Commerce of China, food prices in the country of 1.4 billion people recorded a weekly increase in October. From October 25 to 31, the basket of 30 vegetables increased by 6, 6% from the previous week to 5.99 yuan/kg. During the week of September 20-26, the price was only 4.39 yuan/kg.

Rising inflation also puts pressure on the Central Bank of Russia. The country's consumer prices rose 8.1 percent in October, the highest since early 2016 and higher than the 8% average forecast by analysts surveyed by Bloomberg . Food prices alone soared 10.1%.

The global economy has recovered from a difficult period due to the Covid-19 epidemic, but is stuck in the most severe supply chain bottleneck in history. The latest indicators from Bloomberg Economics have exposed the severity of supply chain bottlenecks around the globe.

 

Even when the container ships are waiting offshore to dock, the goods will be herded into thousands of other containers stuck at the port. Photo: Reuters.

Even when the container ships are waiting offshore to dock, the goods will be herded into thousands of other containers stuck at the port. Photo: Reuters .

70 ships moored off the coast of Los Angeles, loaded with 6m containers. The cargo in these containers can stretch from Southern California to Chicago.

Even if those container ships docked, the goods will be herded into thousands of other containers stuck at the port. They need large numbers of trucks and trailers in a short time.

In other parts of the world, congestion often follows extreme weather and virus outbreaks, such as in Singapore.

According to an analysis, the backlog on November 1 in the financial and logistics hub of the island nation has increased. 53 container ships are moored. This is the highest number since Bloomberg began tracking the data in April.

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