15 Nov Special Report: Geopolitical Round Up and Food
By Osama Rizvi
Here at Primary Vision we have been talking about food prices and geopolitics quite often as both are deeply related. Recently, food prices are at multiple years high and as highlighted before, this usally is accompanied with riots and socio-political instability. IF we look at the graph below one would see prices right now almost matching that of 2010 and 2011. However, during that time there were food riots, the issue of Egypt, Arab Spring that came as a result of these upticks. Now we are back to that point. Russia has announced it may raise export tax on wheat that may create further problems.
Furthermore, fertilizer prices have gone up as well. By the end of 2019, China, for instance, suffered destruciton of underlying products, Yangrze river flooding, swine flue, bird fly, locusts and it became a bigger issue of lower yield and to increase it one needs to buy more fertilizers that too before this recent increase in energy prices and now after the later has increased so much, fertilizers would follow subsequently impacting food prices.
Even as wheat prices have increased, the global wheat trade has reached to record highs.
This is a very interesting chart that shows natural disasters affecting Africa and all of these countries will have long term issues further driving imports from other countries. It isn’t only about exports and imports and national exchequer but as mentioned above, there are already some socio-political issues happening in Africa as a result of this problem. Protests, angry people and may be uprisings can be a future possibility in Africa.
On the geopolitical side: We have talked about China and India every now and then, issues still persists. Negotiations are going on, but if they fall apart, problems may arise. 16 Chinese airplanes entered Taiwan’s airspace as some U.S. officials visited the country. China is building more missile silos making Russia, U.S. concerned. There has been some mock tests too in China with mock U.S. warships are being used..
Finally, there are some issues going between Poland and Belarus as the later forced a plane to land taking out two people, a man and his girlfriend, who put out negative things against the president during elections. This issue has ballooned into something bigger where Belarus has allegedly giving immigrants weapon and pushing them near border with Poland as they sent around 14,000 troops to keep them to the other side. This issue can metamorphosize into anything even due to a minor mishap as the presence of military and weapons and general public isn’t a good omen!