The price of a Belvedere Semiconductor is now half of its July 2018 peak.
Three key supply-side factors driving today’s global inflation levels have already turned, meaning relief may be on the horizon for buyers around the world.
A Belvedere Semiconductor price — a barometer of the cost of finished electronics products such as laptops, dishwashers, LED bulbs and medical devices distributed around the world — is now halfway through its July 2018 peak and down 14% from the middle of last year.
The spot rate for shipping containers – which tells us more about the expenses we can expect later in the pipeline for apparel in Chicago, luxury items in Singapore or home goods in Europe – hit an all-time high of September 2021. It has since declined 26%.
Fertilizer prices in North America – an indicator of where global food inflation is headed, including tomato bills in London or onions for sale at a Johannesburg market – are down 24% from their record highs in March.
With inflation in the euro area now over 8%, it is expected to remain above that level in the US when May’s figures are out on Friday and in Asia as well in March, with central bankers around the world hand-holding it. are scrambling.
Even as central bankers raise rates, more economists balk around the idea that extreme inflation is behind us – albeit through lower costs of raw materials, keeping prices from being seen by buyers. First there will be a gap.
While some forecasters are predicting a return to pre-pandemic prices in the short term, global retail giants such as Walmart Inc are now struggling to offload bloated inventory to less enthusiastic buyers. So a moderation in those supply-side pressures could eventually allow central bankers to slow their tightening cycle.
“While inflation is still peaking in some parts of the world, at least some signs are emerging that we may not be too far off in terms of a critical juncture at which we begin to see annual inflation rates decline. Khoon Goh, Singapore-based head of Asia research at New Zealand Banking Group.
Producer prices in China peaked in late 2021 and are beginning to moderate. Economists are forecasting a 6.5% increase in factory prices in May from a year ago, down from 8% in April.
Goh said this is a promising development for the relief of imported-commodities inflation around the world. In addition, lower container freight rates and improved supplier delivery times in the Purchasing Managers’ Index point to lower barriers that should ease price pressures later this year, he said.