High Inflation Poses Immediate Threat to Businesses and Households

Copper Prices Hit Record Highs, US Grocery Prices Surge
Glencore CEO: "Green Investments... Copper Prices to Rise 50%"

[Asia Economy Reporter Park Byung-hee] The inflation burden on businesses and households is increasing. While there are forecasts that the price of copper, a key raw material in the industry, will rise by 50%, it has also been revealed that the cost of groceries in the United States is soaring.

On the 6th (local time), according to foreign media, Ivan Glasenberg, CEO of Glencore, the world's largest commodity trading company, predicted at the Global Boardroom Summit held online that copper prices could rise by 50% due to the global expansion of eco-friendly investments. The Global Boardroom Summit is a forum where policymakers, CEOs, and leaders from around the world gather to discuss international issues.

CEO Glasenberg said that major countries have set goals to achieve carbon neutrality by 2050, and to meet the resulting copper demand, an additional 1 million tons of copper must be produced annually. However, he added that investment costs must increase to produce copper. Areas where copper can be easily mined have already been developed, and to increase future production, investments must be made in difficult-to-develop regions such as Africa and Russia.

Glasenberg analyzed that investment conditions for copper production have become more stringent, and to increase production, copper prices need to rise to $15,000 per ton. Last week, copper prices surpassed $10,000 per ton for the first time in 10 years, approaching an all-time high. The record high copper price was $10,190 per ton, recorded in February 2011.

The rise in various commodity prices is also affecting food prices. Bloomberg reported that prolonged COVID-19 has caused additional increases in seafood and poultry prices, hitting the U.S. grocery basket prices hard.

The Bloomberg Commodity Spot Index, which tracks prices of 23 commodities, soared to its highest level in 10 years on the 6th. Due to expectations of economic recovery combined with abnormal weather, prices of grains, copper, iron ore, and other commodities have risen to multi-year highs. Bloomberg analyzed that inflationary pressures will increase further due to rising labor costs caused by restaurant labor shortages and supply disruptions in manufacturing.

According to NielsenIQ data, U.S. seafood prices increased by an average of 18.7% over 13 weeks as of the 24th of last month. During the same period, prices of baked goods such as bagels, donuts, and roll cakes rose by 6.5% to 7.6%. Among the 52 grocery items tracked by NielsenIQ, prices of 50 items, excluding butter and milk, increased compared to a year ago.

Major U.S. retailers Albertsons and Safeway reported that due to continued high demand, they do not plan to run price reduction promotions for the time being. The overall rise in prices of groceries, including seafood, is interpreted as a result of increased home-cooked meal demand due to COVID-19. The pandemic led many households to cook at home instead of dining out, continuously increasing grocery demand, and with expanded vaccination and cash payments from stimulus packages, suppressed consumption exploded, causing a larger rise in prices.

John Peyton, CEO of Dine Brands Global, which operates U.S. restaurant chains IHOP and Applebee’s, said that prices of basic goods such as poultry and pancake mix are rising, making nationwide menu price increases inevitable by the end of the year.

This content was produced with the assistance of AI translation services.