U.S. Import prices fall .9% in November and export prices decline .7%, per the bureau of labor statistics. The bureau reported that the decline was led by lower fuel prices.
The bureau further reported that fuel import prices were down a full 3% in November after edging down .1% the previous month. The decline for overall exports was driven by lower non agricultural prices which the bureau said more than offset a .1% uptick in agricultural prices. In spite the November decline, the price index for overall exports was up .7% over the year.
The advance was primarily due to an increase in Soybean prices of 30.2%, 14.5% in corn prices, and a 19.8% rise in wheat prices. These fluctuations will continue, most especially in those areas in which fuel prices have the most influence. In this report, lower fuel prices were cited as the major reason that U.S. import prices fell .9% in November. However, fuel prices increased in the short term after that. The reports for import prices in December will likely reflect this increase in fuel prices. Since fuel prices are set by world markets, the government has little control over the resulting price increases and decreases in imports.
Other significant issues which may affect commodity prices are the continuing lingering drought in the next few months. A major danger in the next few months is also the danger that barges will not be able to transport goods down the Mississippi river due almost historically low water levels. If goods cannot be transported via barges, then goods may have to be transported via rail, which is significantly more expensive. The current prediction is that unless there are significant additional rains, barge traffic will have to be reduced or possibly stopped sometime by end of January 2012 or February 2013.