As prosperity and stability in the U.S. continue to slide, the stock and bond markets have many nervous investors leaning ledge side. Even for those not enticed to the edge, there’s a particular scarcity that deserves readers’ attention. James Freeman in the WSJ reports on the threat to our “fundamental global bedrock – our daily bread.”
A Menace in a Hungry World
The stock and bond markets punish investors, while war and drought related events add to the worry of significant shortages in some wheat-producing regions.
Commodity markets beckon for reasons that are anything but good news for a hungry world. Warfare in some wheat-producing regions and drought in others is threatening a significant shortage.
India Bans Wheat Exports
From Megha Mandavia (The Journal):
Last week India banned wheat exports, saying the food security of the nation is under threat. Severe heat waves have damaged wheat yields across the country. While India isn’t a large exporter of wheat, it is the world’s second-biggest wheat producer and had amassed one of the world’s largest stockpiles as of earlier this year . . .
Before the war, the world had come to rely on cheap and abundant wheat supplies from Russia and Ukraine in particular. The two nations combined account for 29% of global wheat exports, according to data from the U.S. Department of Agriculture.
Who Is Surprised?
Exports from the war zone are not operating as usual. Randy Martinson recently noted at AgWeek that “in the southern Plains hot dry conditions reduced the potential size of the winter wheat crop.”
Also in The Journal, William Mauldin reported earlier this week:
United Nations Secretary-General António Guterres is pursuing a high-stakes deal with Russia, Turkey and other nations to open up Ukrainian food exports to world markets and stave off a potential global food shortage, according to diplomats familiar with the effort.
Russia has sealed off Ukraine’s Black Sea ports to weaken the country and conquer its coast. Mr. Guterres has asked Moscow to permit some Ukrainian grain shipments in exchange for moves to ease Russian and Belarusian exports of potash fertilizer.
Russia doesn’t currently appear to be engaged in earnest negotiations toward a deal, the diplomats said.
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