The oil prices rise steadily and despite the falling demand, especially in the West due to strict lockdowns. At the moment two crude oil benchmarks, WTI and Brent, have hit above crucial $50 mark.
It goes without saying how food prices are going to be affected by the rising oil price during these troubling times.
Since the transportation of goods by roads, both national and international level, the prices of essential items are already being subject to inflationary pressures. The rise in oil price is only going to make it even worse at a critical time.
In addition, the air transport has collapsed by a significant percentage and it will add more pressure to sellers to raise the prices.
Farmers are going to feeling the pinch too: with rising oil price, they cannot afford to use machinery in an optimum capacity – for obvious reasons.
If the rising oil price forces consumers to turn to alternatives such as biofuels, the price of essential items could even go higher than the current values.
It’s true that the oil producers have to survive too: they have to look after the needs of their own populations; they have to invest in research and exploration too.
Most producer are in the opinion that the oil price within the current range, from $40 – $50, is something that they can manage their budgetery needs while addressing the ballooning deficits.Please read more on oil price here