Interest rates and inflation have dominated conversations for businesses over every size, industry, and location around Delaware for much of 2022. A growing consensus seems to be emerging from economists that overall inflation may have peaked, yet some spotty and important inflationary elements remain, such as commodities like food and wages in the service sector and in-demand labor pools.
While most supply chain hiccups have healed, not all of them have recouped. Prices for important energy and agricultural inputs remain challenging. The outlook for commodity prices is subject to many risks. A
release from the World Bank offered this view:
Energy markets face significant supply concerns as worries about the availability of energy during the upcoming winter will intensify in Europe. Higher-than-expected energy prices could feed through to non-energy prices, especially food, prolonging challenges associated with food insecurity. A sharper slowdown in global growth also presents a key risk, especially for crude oil and metals prices.
“The forecast of a decline in agricultural prices is subject to an array of risks,” said John Baffes, senior economist in the World Bank’s Prospects Group. “First, export disruptions by Ukraine or Russia could again interrupt global grain supplies. Second, additional increases in energy prices could exert upward pressure on grain and edible oil prices. Third, adverse weather patterns can reduce yields; 2023 is likely to be the third La Niña year in a row, potentially reducing yields of key crops in South America and Southern Africa.”
