By Adena Ali
Canadians can’t seem to catch a break at the grocery store as food prices continue to soar. Statistics Canada reported Wednesday that food prices rose 7.4 per cent in February compared with a year ago. The rise came as the annual inflation rate climbed to 5.7 per cent, the highest it’s been since 1991.
While some economists forecast a slowdown in inflation in the back half of the year, there is more price pressure to come before we get there.
“Unfortunately, we’re likely to see further acceleration in inflation in March,” says Josh Nye, senior economist at RBC.
Statistics Canada also highlighted dairy products in the consumer price index release because they were one of the biggest contributors to February’s price gains. The rise in the price of dairy products can partly be attributed to the Canadian Dairy Commission’s decision to increase the farm gate milk price by six cents per litre on Feb. 1.
Here’s a breakdown of how much the prices for some popular food items rose between February 2021 and February 2022:
Milk: 6.6 per cent
Eggs: 7.2 per cent
Chicken: 10.4 per cent
Beef: 16.8 per cent
Bacon: 16.1 per cent
Apples: 5.3 per cent
Oranges: 9.4 per cent
Bananas: 3.7 per cent
Other fresh fruit and vegetables: 3.8 per cent
Bread, rolls, buns: 3.7 per cent
Coffee: 8.5 per cent
Nut butter: 5.6 per cent
Potato chips and other snacks: 5.8 per cent
Beer purchased from stores: 3.6 per cent
Wine purchased from stores: 2.1 per cent
Liquor purchased from stores: 1.0 per cent
Baby food: 4.3 per cent
Delivery app services (includes delivery from grocery stores and restaurants): 1.4 per cent
— With files from Jordan Press in Ottawa.
This report by The Canadian Press was first published March 16, 2022.
OPEC+ weighs large oil cutback to boost sagging prices
FRANKFURT, Germany (AP) — The OPEC+ alliance of oil-exporting countries on Wednesday will debate a potentially large cut in the amount of crude it ships to the global economy — a move that could help Russia weather a looming European ban on oil imports and raise gasoline prices for U.S. drivers just ahead of national midterm elections.
Energy ministers from the OPEC cartel, whose leading member is Saudi Arabia, and allied non-members including Russia are meeting in person at the group’s Vienna headquarters for the first time since early 2020 at the start of the COVID-19 pandemic. Russian Deputy Prime Minister Alexander Novak, who has been sanctioned by the U.S., was attending the meeting in Austria’s capital.
A production cut could benefit Russia by establishing higher prices ahead of a European Union ban on most Russian oil imports, a sanction over the invasion of Ukraine that takes effect at the end of the year, analysts at Commerzbank say.
Russia “will need to find new buyers for its oil when the EU embargo comes into force in early December and will presumably have to make further price concessions to do so,” the analysts wrote in a note. “Higher prices beforehand — boosted by production cuts elsewhere — would therefore doubtless be very welcome.”
Moscow also faces a separate push by the U.S. and the other Group of Seven wealthy democracies to impose a price cap on Russian oil by Dec. 5. The EU agreed Wednesday on new sanctions that are expected to include a price cap on Russian oil, an EU official said.
Oil prices surged this summer as markets worried about the loss of Russian supplies from sanctions over the war in Ukraine, but they slipped as fears about recessions in major economies and China’s COVID-19 restrictions weighed on demand for crude.
The fall in oil prices has been a boon to U.S. drivers, who saw lower gasoline prices at the pump before costs recently started ticking up, and for U.S. President Joe Biden as his Democratic Party gears up for congressional elections next month.
It’s unclear how much impact a production cut would have on oil prices — and thus gasoline prices — because members are already unable to meet the quotas set by OPEC+. Yet Saudi Arabia may be unwilling to strain its relationship with Russia even if the world’s largest oil exporter had any reservations about cutbacks and has recently has drawn leaders from Biden to German Chancellor Olaf Scholz to talk about energy supplies.
The Commerzbank analysts said a small trim would likely see oil prices fall further, while the group would need to remove at least 500,000 barrels day from the market to bolster prices.
Such a production cut “would undoubtedly signal to the market the determination and resolve of the cartel to support oil prices,” said UniCredit economist Edoardo Campanella. But supply would drop by less than announced.
“If the group cuts target production by 1 million barrels per day, actual output would likely drop by about 550,000 barrels per day — as countries like Russia or Nigeria that are producing below quota would see their formal target decline but remaining above what they can currently produce,” Campanella said.
At its last meeting in September, the group reduced the amount of oil it produces by 100,000 barrels a day in October. That token cut didn’t do much to boost lower oil prices, but it put markets on notice that OPEC+ was willing to act if prices kept falling.
International benchmark Brent has sagged as low as $84 in recent days after spending most of the summer months over $100 per barrel. U.S. oil prices fell below $80 per barrel Friday. Ahead of the meeting, U.S. crude traded at $86.38 and Brent at $91.66.
The White House declined to comment before OPEC leaders made a final decision on oil production, but press secretary Karine Jean-Pierre told reporters Tuesday that the U.S. would not extend releases from its strategic reserve to increase global supplies.
“We’re not considering new releases,” Jean-Pierre said.
Biden has tried to receive credit for gasoline prices falling from their average June peak of $5.02 — with administration officials highlighting a late March announcement that a million barrels a day would be released from the strategic reserve for six months. High inflation is a fundamental drag on Biden’s approval and has dampened Democrats’ chances in the midterm elections.
Gasoline prices recently turned up because of refinery outages in California and Ohio, and vary widely, from over $6 per gallon in California to under $3 in some parts of Texas and the Gulf Coast, according to motoring club federation AAA. The national average of $3.80 is up slightly but down from a record high on June 14.
One major factor weighing on oil prices has been fears of recessions in places like the U.S. and Europe and slowdowns due to China’s strict COVID-19 measures.
Higher inflation is sapping consumer purchasing power, while central banks are raising interest rates to cool off overheating prices, a step that could slow economic growth. Oil prices at their summer highs, and higher natural gas prices boosted by Russian cutbacks to Europe, helped fuel inflation.
Associated Press reporter Josh Boak contributed from Washington.
David Mchugh, The Associated Press
Prairie premiers, governors urge Canada, U.S. to keep border crossings open longer
Washington – Canada’s Prairie premiers and two U.S. governors want their respective countries to restore pre-pandemic operating hours at entry points along their shared land border.
The group of provincial and state leaders have written to Prime Minister Justin Trudeau and President Joe Biden to argue that curtailed hours at border crossings are hurting the economy.
The letter is signed by Alberta Premier Jason Kenney, Saskatchewan Premier Scott Moe and Manitoba Premier Heather Stefanson, as well as Montana Gov. Greg Gianforte and North Dakota Gov. Doug Burgum.
It says travellers and businesses are being forced to go out of their way to find entry points with longer hours, driving up fuel and labour costs.
The leaders say that’s also hurting smaller border communities along the Canada-U.S. border that depend on international traffic for their economic livelihoods.
The letter does not mention that the U.S. still requires visiting foreign nationals to be vaccinated against COVID-19, a requirement Canada lifted over the weekend.
“Residents and businesses on both sides of the border have expressed concern that the reduced hours of operation will become permanent,” the letter reads.
It also argues that the supply chain problems that have persisted since the onset of COVID-19 in 2020 will only linger so long as cross-border trade and travel remains curtailed by limited hours at border crossings.
“Resuming pre-pandemic operating hours will ensure the efficient and steady flow of people and goods, which will only improve trade activity and reduce inflationary pressure on both sides of the border.”
A notice on the Canada Border Services Agency website warns of limited operating hours at nearly 40 land ports of entry, mostly in the Prairie provinces, along with Quebec, New Brunswick and B.C.
This report by The Canadian Press was first published Oct. 3, 2022.
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