Oil, grain prices high

Oil prices have dipped but are still holding near yesterday's record high which peaked above $80 a barrel. Dealers are keeping an eye on a hurricane in the Gulf of Mexico after a sharp fall in U.S. crude stocks. Prices have climbed 31 percent this year and have quadrupled since 2002, as investors buy into worries over real and potential supply disruptions. Experts say OPEC's deal in Vienna on Tuesday to raise output by a half million barrels per day from the start of November was not enough to reverse rising energy prices. And as you can see from the graph, the price has eased. only slightly. Meanwhile stocks in Europe have rebounded in the latter part of the session thanks to a smaller than expected gain in U.S. jobless claims. Earlier they had fallen, weighed down by the euro's rise to another record high against the dollar and concerns that the market turmoil of late might erode corporate profits. /// European consumers are worrying about the impact of increasing prices for wheat and grain on staple foods like bread and pasta. Wheat prices have surged some 75 percent since April after a dry spring turned into a wet early summer, denting the outlook for crops, particularly in Europe. World stockpiles are at their lowest in 25 years and there is strong demand for grains, providing all the ingredients for a sustained rally. Of course not everyone's complaining about ever rising prices, least of all the farmers. Francois Barret is a wheat producer based in France. SOUNDBITE: Francois Barret, wheat producer, saying (French): "I can tell you than in the past five to ten years, prices just about allowed farmers to maintain themselves, those who weren't in debt could make profits, but for those who had borrowed money, they were not making anything. So we hope the prices stay higher." For lovers of pasta in Italy, and that's just about everybody, ballooning costs are understandably cause for alarm. At Rome's renowned Volpetti food store, where pasta joins other typical Italian products on display, manager Alessandro Volpetti is anxious that consumers should not bear the whole price burden. SOUNDBITE Alessandro Volpetti, Store manager, saying (Italian): "I hope that there is a wise move by all those involved in the cost chain and everybody along the chain absorbs some of the increase in prices when it is this big and the full rise in prices isn't just put on the finished product." /// And finally to China, where a rising number of people are growing seriously rich thanks to the country's economic boom. So with cash burn, luxury goods are in huge demand, and no more so than diamonds. Last year, Chinese consumers spent an estimated one-point-seven billion dollars on diamonds making it the fastest growing market after India. The trend also explains why industry giant, De Beers, is in Hong Kong displaying its latest designs. The jewel in the crown of its latest collection is this necklace containing 305 diamonds and worth a hefty $15 million. /// Darcy Lambton, Reuters. COMPANIES MENTIONED: SYMBOLS:

Submission | September 13, 2007

Tags:. .trend. .luxury. .italian. .meanwhile. .maintain