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Is Food Being Used as a Weapon?
[IFA] When the Covid crisis began, supply chain problems popped up around the globe, leading to outbreaks of fear-based irrational behavior. Who can forget the Great Toilet Paper Crisis where desperate people were seen wrestling each other over a pack of Charmin two-ply?The supply chain issues have intensified since the war in Ukraine. Your own eyes tell the tale when you walk into a supermarket, only to find your favorite cereal is missing. You also start to notice that the loaf of bread, or bag of chips you bought in 2021 is now costing you almost a dollar more. Many of us notice 30% (or more) increases in our favorite food items, well above the published inflation rates of 8 or even 9%. While the supply chain issues are multi-faceted, there are some specific reasons for the problems at hand. The fact that Ukraine and Russia are both major exporters of wheat, corn, and sunflower products is just the tip of the harvest sickle. Back in mid-May, economist James Rickards posted an article where he laid out the reasons for why we could see more food supply issues in the near future. He wrote, "[I]n the Northern Hemisphere, the planting season for 2022 is well underway. Crops were planted (or not) in March and April. Based on that, you can already form estimates of output for next September and October during the harvest season...plantings have been far below normal in 2022, either due to lack of fertilizer, or to much higher costs for fertilizer where farmers simply chose to plant less. This predictable shortage is in addition to the much greater shortages due to the fact that Russian output is sanctioned, and Ukrainian output is nonexistent because it’s at war." Rickards explains that Russia and Ukraine account for 29% of the global wheat exports (19% of corn). But he stresses that this doesn’t mean they grow 29% of the wheat in the world—they grow 29% of the exports. There are some countries, such as Egypt, Lebanon, Jordan, Kenya, Sudan, Somalia, and other African and Middle Eastern nations, that receive a large percentage of their grain supply from Ukraine, Russia or both. Rickards says the situation could become dire because many of the Ukrainian exports have shut down. To make matters worse, the planting season is almost over. Rickards concludes, "And you’re not going to get any grain in October if you didn’t plant it in April or May." Posted by: Besoeker 2022-06-22 |
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