El Niño and Global Food Price Projections through 2028
EconomicsComments
I wonder if the 2028 timeline is a bit too pessimistic. We have seen rapid adoption of drought resistant seed varieties in Southeast Asia that might shorten that window of vulnerability.
We have to read these projections alongside the current volatility in the Strait of Hormuz. The synergy between agricultural shocks and disrupted shipping lanes for fertilizer exports could create a much steeper price curve than El Niño alone would suggest.
The 2007 to 2008 food crisis followed a similar pattern of coinciding weather events and energy price shocks. It took years for the market to stabilize, and the political fallout in North Africa was immediate.
I disagree that the Strait of Hormuz is the primary shipping bottleneck here. Most of the fertilizer precursors for the affected regions move through Atlantic and Pacific routes, so the regional conflict may be a secondary factor compared to the weather.
This makes so much sense given the current soil moisture deficits in the Southern Cone... the carryover stocks are already at historic lows in several key regions!
If the carryover stocks are already that low, are we actually looking at a price floor that never returns to pre 2020 levels? Or is this just another cycle of speculation?
The report ignores how this hits the local transport side. When global prices spike, the small scale truckers in developing hubs often stop moving goods because the fuel costs outpace the freight rates.