Another Sign That The Global Food Shortage Is Coming Soon.

Higher food prices and outright food shortages are not confined to the United States. They are a global phenomenon, as reported here.

The causes are the same all over the world. In the first instance, higher energy prices feed into higher costs for fertilizer (made from nitrogen and natural gas) and higher costs of transportation (since most food is moved by trucks that require diesel fuel).

Another contributor to the global food shortage is the War in Ukraine. Russia and Ukraine together produce about 25% of global exports of wheat, barley, and other critical grains. Many countries such as Egypt, Lebanon, Kenya, and others import between 50% and 100% of all of their grains from Russia or Ukraine. Those countries face starvation this fall when current supplies run low and new imports are unavailable.

Still, other countries such as India, Indonesia, and Brazil are beginning to ban exports of critical foods because they are concerned about feeding their own people in the face of global shortages.

India recently banned wheat exports. Just as countries like Egypt are looking for substitutes for vanishing imports from Ukraine, they find the doors are shut at potential exporters like India.

Indonesia has banned exports of palm oil, which is an essential cooking ingredient and source of calories in many parts of the world. This shut-down process feeds on itself. As more countries ban exports, other countries will join in for fear that their own citizens won’t be able to feed themselves.

In the best case, this process of serial export bans will result in much higher prices for food that is available to those who can least afford it. In the worst case, tens of millions will begin starving to death this fall as there is no food available at any price.

We are perhaps six months away from the greatest humanitarian crisis since World War II. Of course, this type of mass starvation is not just a humanitarian crisis; it can lead to social disorder, revolution, and war.

It’s likely that more people will die from food shortages because of the War in Ukraine than will die on the battlefield. All of this could have been avoided if energy production had been allowed to expand instead of being curtailed by fake climate alarm and if the war had been avoided by diplomacy and reasonable compromise.

The Biden administration bears as much blame as Putin for these failures. Instead of common sense and compromise, we have war and likely starvation. Investors who are spooked by stock market collapses so far this year should prepare for an even more catastrophic crash in the coming months.

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