This matters for emerging markets (EM) more than developed markets, because lower incomes in EM means a higher proportion of spending goes on food. There's enough famous Marie Antoinette "let them eat cake" examples to justify concern about unrest when food prices go up in EM pic.twitter.com/HoXN8zh2IX
— Charlie Robertson (@CharlieTTEcon) January 18, 2021
It looks like the global agricultural surplus has been bought up by China. Together with India (but India has bought much less and has far lower stocks per capita), China appears to have bought up the entire global wheat surplus pic.twitter.com/BthXMGdDqx
— Charlie Robertson (@CharlieTTEcon) January 18, 2021
This means that agriculture exporters like Canada, US, Australia, Argentina, Russia (*), Ukraine and Kazakhstan should have an export boost while food importers like Egypt (the world's biggest wheat importer) and countries like Turkey face more challenges
— Charlie Robertson (@CharlieTTEcon) January 18, 2021
* Russia domestic grain prices are closely linked to the world price (Russian traders are smart and arbitrage between them) so we'll see export restrictions to crash the local price in Feb.
In the medium-term, good global stocks suggests upward price pressures won't last
— Charlie Robertson (@CharlieTTEcon) January 18, 2021