Aurelia Butler

Riyaz Ahmed’s mill on the outskirts of Mysuru, part of a fertile agricultural belt in southern India, is stacked with gunny bags full of an unexpectedly precious commodity: rice.Prices for rice, tomatoes and other staples have surged in recent weeks as the erratic arrival of India’s annual monsoon has upended agricultural production. While heavy rains in some areas washed out crops, their delayed arrival here and elsewhere is stoking fears of poor harvests and even higher prices.“The monsoon is late . . . and now water is short”, said Ahmed, 69, who has been milling rice for nearly 30 years. “Everyone from the lowest to the highest earners is suffering, including me.”This surge in food inflation has become a swelling source of concern for Prime Minister Narendra Modi’s government, which last week banned exports of several rice varieties after weeks of public anger over high prices.The move sent shocks around the globe, with the IMF calling on Modi’s government to reverse its “harmful” decision. India is the world’s largest rice exporter, and many countries depend on it for shipments of the staple.Analysts said controlling food prices had become a priority for Modi’s Bharatiya Janata party as it prepared for a series of crucial elections, including several state polls this year and the national vote in less than 12 months.“When it comes to food trade, no government — Modi or anyone — takes a longer-term view,” said Avinash Kishore, a senior research fellow at the International Food Policy Research Institute. “Poorer Indians’ pockets are already being pinched [and] with grain prices going up, no government would want to take that risk, even in a normal year — and this year is an election year.”

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The monsoon, which passes across India from June to September, often triggers volatility in food prices. Yet scientists warned that these vital rains are becoming less reliable, leading to more frequent flooding in some areas and droughts in others as climate change alters once-predictable weather patterns.This season has been tumultuous for food markets. Tomato prices have risen about 400 per cent since last month after torrential rains hurt the crop, while the cost of rice has increased 11.5 per cent since last year.“How to buy? That’s the question I’m asking myself,” said Jeetu Singh, a 32-year-old migrant labourer at a wholesale vegetable market near Mysuru in India’s south-western Karnataka state. “Tomato, rice, dal — everything has gone up.” Another shopper, Jayalakshmi, said she had been cutting back on lentils, oil and other essentials in order to afford her bills.Though the consumer inflation rate of 4.8 per cent in June remains within the Reserve Bank of India’s target range, the central bank warned this month that the surge in food prices showed “the fight against inflation is far from over”.

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The government argued that the rice export ban, which applies only to non-basmati white rice and accounts for about 40 per cent of the country’s exported varieties, would protect domestic consumers while allowing cereal to flow into the global market, helping Indian farmers.Authorities have responded to the tomato price surge with everything from subsidies to a “hackathon” designed to improve the supply chain.Higher food prices have in the past proved politically precarious for incumbent Indian governments, with analysts attributing famous election upsets to anger over high onion prices.India’s opposition has seized on the latest surge to attack Modi’s government. Mallikarjun Kharge, president of the Indian National Congress, the main opposition party, blamed vegetable price inflation on the BJP’s “loot” and “greed”.“The public has become aware and will answer your hollow slogans by voting against the BJP,” he said this month.

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The BJP remains the favourite in national elections, which are due in the first half of next year, but faces a series of potentially tough state polls in Rajasthan and Madhya Pradesh later this year. It suffered a major setback in May, losing control of Karnataka to Congress.One of Congress’s campaign promises in Karnataka was to double the amount of free rice given to low-income families. Its new state government this month started a cash transfer scheme designed to finance consumption of the grain.The BJP’s restrictions on rice exports, designed to appease consumers, have upset another powerful constituency: farmers, many of whom stood to benefit from higher prices.

Rajpal Singh, a rice farmer in the north-western state of Punjab, dismissed the export restrictions as a gimmick to manage public perception ahead of the elections. “The government is trying to keep food prices under control because . . . food prices matter the most to a majority of voters,” he said. “They think public memory is short.”Swamy K, a 68-year-old rice farmer in a village near Mysuru, said he remained loyal to Modi even though he loathed Karnataka’s erstwhile BJP government. But he said his patience with the party was running thin.“Politicians keep saying that farmers are the backbone of the country, but that backbone has long been broken,” he said. “They put us on posters, but give us nothing.” More

Abdellatif Jouahri, Governor of Bank Al-Maghrib presented the figures to King Mohammed VI during a reception at the Royal Palace of Tetouan, according to a bank press release.The Moroccan economy has suffered from a challenging global context and a particularly severe drought, Jouahri explained. “Despite this adverse economic context and the effort made to ease the impact of prices hike on households and enterprises, the public finance situation continued to recover, with the budget deficit falling to 5.2 percent of GDP”, he added.Morocco’s economic growth is forecast increase to 3.6% in 2024 after an expected 3.3% growth this year assuming an average cereals harvest and an increase in exports, the country’s statistics agency HCP said earlier this month. More

By Michael S. Derby(Reuters) – Less tight financial conditions as exhibited by the red-hot stock market may increase the chances that the Federal Reserve hikes rates again before the end of the year, some economists reckon, even as financial markets put little odds on that happening. Several measures of financial conditions, including those produced by the central bank, have shifted in way that signals reduced restraint on the economy, at a time when central bank officials believe more work may be needed to lower inflation.Taking in to account everything from stock prices to measures of borrowing costs for the government, businesses and households, financial conditions matter to monetary policy. That is because the Fed relies on markets to transmit changes in its short-term interest rate target to the broader economy. The current slackening in these gauges means markets and the Fed are starting to go on separate paths. “Easy financial conditions obviously boost near-term growth,” and can encourage more risk-taking of the sort that can lean against the restraint the Fed is trying to impose on the economy, said Benson Durham, head of global policy at Piper Sandler. On Friday, the Federal Reserve reported that its Financial Conditions Impulse on Growth for June moved to 0.458, from May’s 0.603 reading. The index, now the lowest since August 2022, seeks to describe whether financial conditions are aiding or restraining growth, so the latest reading points to them providing less drag on the economy. Meanwhile, Goldman Sachs’ closely watched Financial Conditions Index has been easing fairly steadily since May. As of the end of July, that measure was also at levels last seen in late August of last year, while the Chicago Fed’s latest index has also pointed to easier conditions. Since March of last year, the Fed has been engaged in a historically aggressive campaign of short-term interest rate increases, taking its target rate from near zero levels to between 5.25% and 5.5% after a quarter percentage-point increase on Wednesday. An explicit goal has been to tighten financial conditions. Mortgage rates have soared to around 7%, while other borrowing costs are up. Rate hikes also slammed the stock market, at least for a time, while pushing up the dollar relative to other currencies. Tighter financial conditions have helped accomplish the Fed’s desire to slow down the economy in a bid to lower inflation pressures from multi-decade highs. But now things are shifting the other way, which could create issues for the Fed as it approaches the endgame for its tightening cycle. FED WILL ‘GET TO WHERE WE NEED TO GO’The various gauges on balance show financial conditions reached their most restrictive levels late last year, and have receded since. That dovetails with a stock market rally that has pushed up the benchmark S&P 500 Index by nearly 20% so far this year. Meanwhile, yields on the riskiest corporate debt securities – so-called junk bonds – have fallen by about 1.2 percentage points since last autumn even as the Fed kept raising interest rates.Fed Chair Jerome Powell, who has regularly faced questions about financial market expectations diverging from officials’ outlooks, brushed off easier financial conditions in this week’s press conference that followed the Federal Open Market Committee meeting. He attributed easier financial conditions to the stock market rally and a weaker dollar, and appeared to view the current situation as one that will work itself out over time. “We will do what it takes to get inflation down and in principle, that could mean that if financial conditions get looser, we have to do more,” Powell said. “But what tends to happen, though, is financial conditions get in and out of alignment with what we’re doing, and ultimately over time we get where we need to go.”Powell noted in the press conference that it is a tossup as to whether the Fed raises rates or holds steady in September. He offered no views on whether the central bank will be able to boost by another quarter percentage point by year’s end, as June FOMC forecasts predicted. Piper Sandler’s Durham said the easier financial conditions make the odds of another rate rise higher by year’s end, in contrast with the current market outlook. This easing gives officials “the space and the breathing room” to bump rates up again, especially in an economy that is otherwise doing very well despite aggressive increases. Bank of America (NYSE:BAC) economists said in a note on Thursday that they believe market pricings show an underestimation of what the central bank needs to do on rates. They said easing inflation in the face of still-strong jobs data and better-than-expected growth “are likely to keep the Fed worried that its policy stance is insufficiently restrictive.”Still, the Fed may yet find space not to hike rates again. Even as many key aspects of the economy have remained strong in the face of higher rates, inflation pressures are easing. On Friday, the government reported that inflation pressures last month and employment costs in second quarter eased. More

O’Regan said he had directed the Canada Industrial Relations Board to determine whether the rejection of the tentative agreement by the dock workers in Western Canada has eliminated the possibility of a negotiated resolution.”If the Board determines that to be the case, I have directed them to either impose a new collective agreement on the parties or impose final binding arbitration to resolve outstanding terms of the collective agreement,” O’Regan said in a post on social media platform X, formerly known as Twitter.The International Longshore and Warehouse Union, representing about 7,500 dock workers, rejected a proposed labor contract on Saturday that would have ended a dispute that has already affected trade and could have more economic repercussions by disrupting operations at the country’s busiest ports. More