Blackink Research
No Result
View All Result
  • Login
  • Register
Subscribe
  • Home
  • Research
    Sofi Technologies Inc. - Full company analysis and valuation by Blackink Research

    SoFi Technologies Inc. – Full company analysis

    Upstart Holdings Inc. - Blackink Research

    Upstart Holdings Inc. – Full company analysis

    Lockheed Martin Corporation - Blackink Research

    Lockheed Martin Corporation – Full company analysis

    JPMorgan Chase & Co - Blackink Research

    J.P.Morgan Chase & Co. – Full company analysis

    ASML Holding NV - Blackink Research

    ASML Holdings N.V. – Full company analysis

    Visa Inc. – Full company analysis

    Foot Locker Inc. - Blackink Research

    Foot Locker Inc. – Full company analysis

    Microsoft Corporation - Blackink Research

    Microsoft Corporation – Full company analysis

    Apple Inc. - Blackink Research

    Apple Inc. – Full company analysis

  • Opinion
    Reasons behind the Twitter buyout by Elon Musk - Blackink Research

    The reasons behind the Twitter buyout

    Technical Analysis - Blackink Research

    Is technical analysis any different from guessing?

    Unstable Stablecoins: an overview of TerraUSD collapse - Blackink Research

    Unstable Stablecoins: an overview of TerraUSD collapse

  • Economy
    The global food crisis - Blackink Research

    The global food crisis incoming

    Consumer Spending in the United States signals weaknesses

    Consumer spending is signaling weaknesses in the United States

  • Business
    Reasons behind the Twitter buyout by Elon Musk - Blackink Research

    The reasons behind the Twitter buyout

    Consumer Spending in the United States signals weaknesses

    Consumer spending is signaling weaknesses in the United States

    Unstable Stablecoins: an overview of TerraUSD collapse - Blackink Research

    Unstable Stablecoins: an overview of TerraUSD collapse

    Apple’s Privacy Policies in depth

    Apple’s Privacy Policies in depth

  • Tutorials
    Sources of competitive advantage - Blackink Research

    The ten sources of competitive advantage

    How to study a company - Blackink Research

    How we study a company

    What drives value in the stock market? | Blackink Research

    What drives value in the stock market?

    How to value a company using the Discounted Cash Flow Model (DCF)

  • Info
    • About Us
    • Contact Us
    • Legal
    • Privacy Policy
    • Cookie Policy
  • Newsletter
  • Home
  • Research
    Sofi Technologies Inc. - Full company analysis and valuation by Blackink Research

    SoFi Technologies Inc. – Full company analysis

    Upstart Holdings Inc. - Blackink Research

    Upstart Holdings Inc. – Full company analysis

    Lockheed Martin Corporation - Blackink Research

    Lockheed Martin Corporation – Full company analysis

    JPMorgan Chase & Co - Blackink Research

    J.P.Morgan Chase & Co. – Full company analysis

    ASML Holding NV - Blackink Research

    ASML Holdings N.V. – Full company analysis

    Visa Inc. – Full company analysis

    Foot Locker Inc. - Blackink Research

    Foot Locker Inc. – Full company analysis

    Microsoft Corporation - Blackink Research

    Microsoft Corporation – Full company analysis

    Apple Inc. - Blackink Research

    Apple Inc. – Full company analysis

  • Opinion
    Reasons behind the Twitter buyout by Elon Musk - Blackink Research

    The reasons behind the Twitter buyout

    Technical Analysis - Blackink Research

    Is technical analysis any different from guessing?

    Unstable Stablecoins: an overview of TerraUSD collapse - Blackink Research

    Unstable Stablecoins: an overview of TerraUSD collapse

  • Economy
    The global food crisis - Blackink Research

    The global food crisis incoming

    Consumer Spending in the United States signals weaknesses

    Consumer spending is signaling weaknesses in the United States

  • Business
    Reasons behind the Twitter buyout by Elon Musk - Blackink Research

    The reasons behind the Twitter buyout

    Consumer Spending in the United States signals weaknesses

    Consumer spending is signaling weaknesses in the United States

    Unstable Stablecoins: an overview of TerraUSD collapse - Blackink Research

    Unstable Stablecoins: an overview of TerraUSD collapse

    Apple’s Privacy Policies in depth

    Apple’s Privacy Policies in depth

  • Tutorials
    Sources of competitive advantage - Blackink Research

    The ten sources of competitive advantage

    How to study a company - Blackink Research

    How we study a company

    What drives value in the stock market? | Blackink Research

    What drives value in the stock market?

    How to value a company using the Discounted Cash Flow Model (DCF)

  • Info
    • About Us
    • Contact Us
    • Legal
    • Privacy Policy
    • Cookie Policy
  • Newsletter
No Result
View All Result
Blackink Research
No Result
View All Result
Home Economy

The global food crisis incoming

Matteo Marinelli by Matteo Marinelli
June 1, 2022
Reading Time: 3 mins read
0
The global food crisis - Blackink Research

Image from Reuters

ADVERTISEMENT

Ukraine is long been one of the most important countries for food production, as 57% of the country’s land was used for growing crops in 2019, making it one of the most cultivated countries in the world. Furthermore, Ukraine accounts for more than 30% of the world’s production of sunflower oil, widely used in food production, and grows 4% of the world’s wheat. The fact that the country produces way more than it consumes translates to it accounting for almost 10% of global wheat exports, 13% of corn export. Moreover, it’s the largest producer and exporter of sunflower oil.

RELATED POSTS

Consumer spending is signaling weaknesses in the United States

Ukraine’s exports of grain and oil seeds have mostly stopped, and Russia’s are threatened. Together, the two countries supply 12% of traded calories. Wheat prices, up 53% since the start of the year, jumped a further 6% on May 16th, after India said it would suspend exports because of an alarming heatwave.

With the beginning of the conflict, however, not only exports were greatly reduced, but production declined too for obvious reasons: at the moment, around 25 million tonnes of grain are stuck in Ukrainian ports that are being blockaded by Russian forces. Some grain was exported to European countries by rails, but there is a significant problem in doing so since the rail systems between Ukraine and European countries are different, thus requiring grain to be unloaded and then reloaded at the borders. Furthermore, with several amounts of Ukrainian farmland turning into a battlefield, and with roads and ports under attack from Russian missiles and bombs, the country’s food supply chain is completely disrupted.

Another important country in the food production is China, accounting for 20% of total world’s exports. However, the zero-covid policy currently enforced in the country reduced the amount of farmers working and, hence, the amount of food produced.

As of the current estimates, between 19 and 34 million tons of export production could disappear this year. Next year, depending on the situation in the country, the figure could be between 10 and 43 million tons, which translates into the necessary caloric intake for 60 to 150 million people. Furthermore, a reduction in the supply of food, aside from the hunger problems, means that prices are expected to rise, and these higher prices will affect an even broader range of the world’s population, well beyond the 150 million people estimated.

Reduced grain exports will hit particularly hard African and Middle East countries. Indeed, Ukraine accounts for 80% of Lebanon’s wheat imports and is a leading supplier for countries such as Somalia, Libya and Syria. Egypt imports almost two-thirds of the wheat it consumes, making it the world’s largest wheat importer, and more than 80% of those imports come from Ukraine and Russia: although most of the imports go into domestic consumption, the country processes these commodities to export to Eastern Africa.

The effects of the war in Ukraine will be heard by many countries in the world. Poor countries, which are already facing widespread hunger, will feel the pain the most. Countries that are a food exporter are less likely to suffer, and countries like China, which has abundant strategic reserves, are better positioned than most. Moreover, the latter countries may use their reserves as a diplomatic tool to generate goodwill from suffering countries.

ADVERTISEMENT

At the present moment, the situation appears to be worse than what we have expected in the last decades. A limited-disruption scenario would still have impacts that last until 2024: in such a scenario, we see limited sanctions and miss one planting season. The reason for it being so long is that farmers will take some time to recover to normal planting. Missing a harvest or being unable to export would leave farmers low on funds for seeds, fertilizer, and agricultural equipment, making future harvests smaller. If the war, instead, drags out much longer, several planting seasons and harvests could be missed. Furthermore, there could be an escalation in sanctions which, at some point, could also include some agricultural commodities, or there might be governments that stop exporting vital commodities to countries that need them.

The crisis threatens to get worse, as Ukrainian silos that are yet undamaged by the fighting, are already full of corn and barley: farmers have nowhere to store their next harvest, which risks of rotting. Furthermore, there is a shortage of fuel and labor to plant the next harvest due to the conflict in the region. One solution to the global food crisis would come from breaking the Black Sea blockade, but that doesn’t seem easy: indeed, Russia would need to allow Ukrainian shipping, Ukraine should de-mine the road to Odessa, and Turkey would need to let naval escorts through the Bosporus. The cooperation between these three countries, however, is unlikely.

Tags: Food CrisisMacroeconomicsSupply ChainUkraine
ShareTweet1Share1Send
Matteo Marinelli

Matteo Marinelli

Matteo Marinelli is an active investor who focuses his strategy on fundamentals, financial statement analyses, geopolitics and macroeconomic factors. He co-founded Blackink Research in 2022.

Related Posts

Consumer Spending in the United States signals weaknesses
Economy

Consumer spending is signaling weaknesses in the United States

by Matteo Marinelli
May 24, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Latest

  • All
  • Research
How to study a company - Blackink Research

How we study a company

April 13, 2022
Amazon.com Inc. - Blackink Research

Amazon.com Inc. – Full company analysis

March 6, 2022

Intel Corporation – Full company analysis

April 15, 2022

Popular Stories

  • ASML Holding NV - Blackink Research

    ASML Holdings N.V. – Full company analysis

    12 shares
    Share 5 Tweet 3
  • Upstart Holdings Inc. – Full company analysis

    9 shares
    Share 4 Tweet 2
  • Unstable Stablecoins: an overview of TerraUSD collapse

    9 shares
    Share 4 Tweet 2
  • SoFi Technologies Inc. – Full company analysis

    8 shares
    Share 3 Tweet 2
  • Nvidia Corporation – Full company analysis and valuation

    7 shares
    Share 3 Tweet 2
ADVERTISEMENT
Blackink Research

Blackink Research © 2022

Useful links

  • Blog
  • About Us
  • Contact Us
  • Legal
  • Privacy Policy
  • Cookie Policy

Follow Us

No Result
View All Result
  • Home
  • Subscription
  • Categories
    • Research
    • Opinion
    • Business
    • Economy
    • Tutorial
  • Info
    • About Us
    • Contact Us
    • Legal
    • Privacy Policy
    • Cookie Policy

Blackink Research © 2022

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?