Commodity prices and new technologies
Global inflation refers to the overall increase in prices of goods and services around the world. It is typically measured by the percentage change in a basket of goods and services over a certain period of time, such as the consumer price index (CPI). Inflation can have a range of impacts on economies and individuals, including reducing purchasing power, impacting wage growth, and affecting the value of financial assets
An important by-product of global inflation is the search for new commodity sources. Commodities are natural resources that are traded on global markets, such as oil, gold, and agricultural products. When demand for a particular commodity increases, it can lead to a rise in its price. This, in turn, can contribute to overall price increases and inflation.
If we look at the chart below, comparing the harmonic index of consumer prices vs food inflation in the Eurozone, we can see how it indicates the extent of inflation spread on overall consumer prices, but most dramatically on commodities and food prices.
As global populations and economies continue to grow, and risk factors such as China resorting to lockdowns are becoming more real, there is increasing demand (and risks of shortage of supply) for a wide range of commodities, which can put pressure on prices. This has led to a search for new sources of these commodities, including exploration for new deposits, and most importantly, the development of new supply chains amid weak global ties across the world. However, the search for new commodity sources can also come with a range of challenges and costs, which is why the time has come for new technologies to make the sourcing process more efficient and transparent.
On that note, for companies looking to diversify their location-specific risk when it comes to commodity suppliers, as well as seeking reliable partners, Powerlinx, a B2B business matchmaking platform, can serve as a tool to fast-track the process of searching and explore new business opportunities.