Nature Be Kind
Across the world, crop prices have been growing at paces unseen in years. On some measures, the prices for crops such as wheat, corn and soybeans haven’t reached these levels since 2014.
Different crops mean different problems. For farms in the U.S., Brazil and Russia, it is a drought that is wrecking harvests. For countries like Vietnam, Malaysia and Indonesia, the problem comes in the form of too much water.
Floods are ruining their rice fields and are hurting these countries’ ability to thrive during this pandemic. In a time where many are looking to get back on their feet, the rising costs of products such as cooking oil or sugar is an unnecessary add-on to the mess that has already appeared.
As for what that means for the industry, these price increases can push up broader inflation indexes in some countries and could even make it harder for central bankers to pass more monetary stimulus for stabilization and growth.
Does Mother Nature have a bigger effect on the economy than the government and central banks?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
