While politicians in the election campaign for the electorate to impose his own recipes to combat prices and threatening to punish speculators, we decided to look into the causes of these pre-election increase in the cost of food.
Domestic Theme higher prices for food products suitable for populism and speculation, since they account for about 50% in the consumption basket of the Ukrainians. In fact, this is an excellent illustration of the poverty of our people, consumer sentiment is easy to manipulate. For comparison: in Poland products occupy about 30% of the consumer basket, while in Germany the cost of food for own preparation make up only 10% of
economic causes of rising prices “do not notice”
Deja Vu with a sharp increase in prices for different types of so-called social food products were registered in the domestic market in virtually all of the time of election campaigns the 2000″s (2004, 2006, 2007 and 2009-2010).
Price monitoring conducted by the State Inspectorate for Control over prices, illustrates the dynamics of product development. Past Presidential Elections (2004) characterized by a price crisis in the meat market, while beef has increased in price by 32%. The parliamentary elections in 2006 has risen in price bread - 20-22% higher and the first grade. During the early parliamentary election in 2007 “took off” prices for sunflower oil (59%), milk (49%), beef (20%) and “social” bread (16-18%). In 2009, became more expensive dairy products (22%) and sugar (99%), followed in January 2010, they added the price is 9,5% and 26% respectively. Independent experts, in contrast to the Ministry of Economy, convinced of the absence of any economic preconditions for the rise in price, known as very concrete reasons for this trend.
Political uncertainty, as the economist of the International Centre for Policy Studies, Alexander Acorn, only increases the rate of price growth. Regarding the key reasons, one of them - an increase of social payments, which the authorities carried out since 2004. By the way, the meat crisis that year was largely triggered by just the appearance of additional money from consumers.
“Generous allowances (increase of pensions, scholarships, minimum wages) that are used to of encouraging poor people, give the effect to be counterproductive: a greater return, these people immediately spend the money to buy food. A sharp rise in demand with a steady supply invariably entails an increase in prices “, - explains a senior analyst at investment firm Phoenix Capital Andrew Nesteruk.
experts allocate another specific cause for the growth in food prices in 2006-2007: this period was marked surge in foreign investment and debt capital to Ukraine from abroad. “The fixed exchange rate of hryvnia currency and buy the National Bank of investors have increased the annual hryvnia mass inside the country by 20-30%. As the authorities make no effort to its withdrawal (eg through the production and sale of OGVZ),” extra “money stimulated the rise in food prices” - reminds Andrew Nesteruk.
other objective reason - the world prices for raw materials. Such seasonality coincides with the electoral campaigns in Ukraine. Traditionally, prices for crops are changed after the new harvest: in the late summer - early fall (at the same time held the race 2004, 2007 and 2009). The increase in world prices in 2007 for sunflower oil led to its rise in price by 40-60% in Ukraine.
“Then the market for raw resources, joined venture capital, which is why prices of sunflower reached nearly $ 1000 /t, and oil - $ 2000 /t. A year later the price of sunflower oil have fallen to $ 600-700 /t, - the general director of association “Ukroliya Stepan Kapshuk. Given that 80% of sunflower oil is exported abroad, the Ukrainian market has developed in the wake of global trends.
Because of the low grain yield at the same time became more expensive flour and bread. A similar situation exists with sugar. According to Chairman of the Board Nasua “Ukrsahar” Nicolae Platon, problems with the prices of sugar and seasonal variations traditionally occur before the new production season.
The current election campaign, accompanied by a rise in price of products are objective reasons, and speculative factors. For e1000xample, if you take the same sugar, here, first, world prices have reached a maximum of thirty (in Europe - 1300 Euros /t, in Russia - $ 1200 /t). And secondly, because of the reduction of sugar beet in Ukraine, a deficit of its own beet sugar, which, incidentally, predicted earlier. In addition, weekends and holidays, extending nearly half of January, plus bad weather led to the fact that inventories of sugar in the small towns just ended. Read More »
The technical analysis of currency pairs 05.02.2010
USD /JPY
Prices are consolidated in the 89.70 resistance level. If he will be overcome to continue growth, the primary purpose of which is likely to become a mark 90.00 and, further, 90.40. The probability of this outcome suggests that, at the 4-hour chart (Figure 1) trend indicator OsMA bought a rising trend. Up aims and SS (at the same time he left the band overselling). At the same time, RSI charted a U-turn in the opposite direction. Therefore, it is possible that this level will not be passed and prices, rebounding from him, will return to the course mark 89.40. On the hourly chart (Fig. 2) OsMA directed upward, thus confirming the assumption about the possibility of breaking a mark 89.70 and further growth. Oscillators, as in the 4H different direction.
In my opinion, the possibility of opening positions for the purchase with a close stop-loss should be considered only after the confirmation of a breakthrough price resistance level 89.70.
Support: 89.40, 89.00, 88.70, 88.40/30, 88.00, 87.40/30, 87.00, 86.40, 86.00/85.90, 85.20/00, 84.40/30, 84.00, 83.00.
Resistance: 89.70, 90.00, 90.40, 90.70, 91.00, 91.50/55, 92.00, 92.40, 92.70/85, 93.00/20, 93.50/60, 94.10/00, 94.60/50, 94.90/95.00, 95.30, 95.90/96.00, 96.30, 97.00, 98.00.
USD /CHF
prices after an unsuccessful attempt to overcome the 1.0760 mark, returned to a mark 1.0730. If it is passed, is expected to further decline to a level of 1.0700. About the beginning of rollback its reversal (both in the overbought zone) signaled oscillators at 4-hour chart (Figure 3). At the same time, the trend indicator OsMA steadily upwards. Therefore, it is possible resumption of growth in prices after the rollback. On the hourly chart (Figure 4) OsMA and RSI acquired a downward direction. All this confirms the supposition about the possibility of breaking a mark 1.0730, and the continuation of the declining phase of motion.
In my opinion, is to wait for clarification of the situation, before making any trading decisions. With the resumption of growth and confirming the presence of signals on the hourly chart to consider the possibility of opening positions on the purchase after the confirmation of a breakthrough level of 1.0760.
Support: 1.0730, 1.0700, 1.0650, 1.0600, 1.0550, 1.0500/1.0490, 1.0445, 1.0400/1.0390, 1.0360/50, 1.0320/00, 1.0280, 1.0250/40, 1.0200, 1.0175, 1.0140/30, 1.0100, 1.0070, 1.0035, 1.0000, 0.9975.
Resistance: 1.0760, 1.0800, 1.0850/60, 1.0900, 1.0935, 1.1000/10, 1.1050/60, 1.1100/20, 1.1150, 1.1200/15, 1.1270, 1.1320. Read More »