Ongoing food crisis: India bans exports of wheat...

 

Wheat exports in India. CNBC/Bloomberg/Getty.

In another blow to global grain supplies, India has banned exports of wheat. CNBC. India cited out of control inflation along with a massive heat wave that damaged crops for the decision. Global buyers were counting on India, which is the world's second largest produce or wheat, to make up for shortfalls from eastern Europe, where the Ukraine war has caused massive problems in production and logistics. India was expected to ship out a record 10 million tons this year. India will honor current orders and will try to help with countries that are dealing with food insecurity. With Indian wheat no longer on the market, prices will rise and there is no credible country to make up the difference...

My Comment:

This is a huge story that isn't getting anywhere near the amount of coverage it deserves. Keep in mind that India's export ban comes on the heels of several other disasters. The war between Russia and Ukraine is the big obvious problem since Ukraine is Europe's breadbasket, but that is not the only problem. China's winter wheat crop failed due to torrential rains. And America's winter wheat crop was heavily damaged by droughts. 

All of this is going to add up and countries like Egypt that import most of their foods are going to have a huge problem trying to get wheat. And poor countries are not going to be able to deal with the high price inflation that this is going to cause. 

Food insecurity is a huge threat, not just because it can cause widespread misery and death through starvation. It's also a major cause for political instability and civil war. Like I said in the baby formula post I wrote earlier in the month, a person that can't feed their family or themselves have almost nothing to lose. Why not go all in and try to make a better life for yourself? 

It's widely thought that the huge spike in food prices that caused the Arab Spring. If you may remember, that lead to several revolutions and a lot of political instability. It also led to two of the worst wars in recent history, the Syrian and Libyan civil wars. I think it is very possible we might see the same thing this time around. 

With that being said, I am not worried about food supplies in the United States. We produce massive amounts of food and most people have problems with having too much food as opposed to not enough. Though we have had problems with our winter wheat, there isn't really any evidence that our other crops are going to fail. And we are a net food exporter, not an importer. We should be fine here, at least in terms of people not starving to death. 

But I do worry about the high food prices adding to our already unstable system. High food prices are hardly the only problem our country is dealing with and it will contribute to our most pressing issue, inflation. When everything else is getting massively more expensive it will not help us when even bread costs more. 

Though we should hardly complain when the real victims of this are going to be people starving to death in the third world. I am glad that India said they will continue to help out in that area but I worry that supplies won't be enough. Like the article said, we don't have anyone to pick up the slack, Ukraine is a mess and Russia is under sanctions. America can help, but only so much. I don't know what else can be done...