The world walks on its stomach. But where?

Here is a moment when the news you don’t see on TV, goes into your fridge, your wallet, and if you are sensitive enough – also into your stomach (in the box section). I’m talking about food prices, of course – a constant and justified concern, but an in-depth review of the Yelin-Lapidos investment house, which just won first place in the Capital Market Authority’s ranking for 2021, reveals that this is a much more complicated and disturbing business than we think as consumers in the supermarket. It’s a big, international drama, and it has many episodes. I dived into the review to bring a few points that give the picture, as always – I recommend those who wish to go read the full article. I promise to attach a link for your benefit at the end.

Amir Elshikh Yelin Lapidot (Photo: Yossi Tzbaker)

1. First of all – prices are rising, and not only here. In the US, food prices have risen by at least 1% in each of the past seven months, and by 10.9% in total over the past year. In other countries, prices have also risen to such an extent that consumers in Nigeria are giving up meals because of the price of rice and in Mexico people are unable to buy avocados.

2. The immediate suspect: the war between Russia and Ukraine. Even without mentioning the terrible cost in human life, this war exacts a very high price from the entire world. These two countries together provide, in a normal year, about a third of the world’s wheat crop, about 20% of the world’s corn crop, and in general – about 12% of the calories consumed in the world. Now, when many fields have been destroyed, agricultural work has been disrupted and the maritime export routes have been blocked – not only these two are in trouble, but the whole world. And that’s even before we talked about the shortage of fertilizers for agriculture that was created due to that very war.

3. Corona also has a role here. The current crisis comes after many countries entered into deficits and crises due to the corona virus, therefore any such threat undermines, just like that, the social and political stability in the country. This is especially noticeable in African countries, but certainly not only. And studies already prove that food crises bring political unrest (according to the Arab Spring).

4. Drought is not a biblical crisis – it is a burning economic issue. Global warming and the dramatic changes in the weather directly affect food prices. A drought in Kansas has damaged wheat crops, a drought in South America is leading to a shortage of soybean oil, and all this before we even talked about forecasts for a shortage of irrigation water, an increase in the amount of plant diseases and the disappearance of agricultural land due to an expected rise in sea levels.

5. Behind the numbers – there are hungry people. Every percentage point in the increase in food prices – means another 10 million people in the world who deteriorate into a situation of extreme poverty and a real lack of food. Already today there are about 770 million of them. Is this a one-off crisis or a global trend? There are opinions here and there, and they are all thought-provoking. We are here to continue to follow, and in the meantime – it is very worthwhile to read the detailed and complete review by Amir Alsheikh from Beit Yelin Lapidot, Right here




Source: Maariv.co.il – כלכלה בעולם by www.maariv.co.il.

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