00:00The question that you tackled in this recent piece was whether we're heading for another food crisis.
00:05What's your conclusion?
00:06My conclusion is this way too early to call it a food crisis.
00:10Do we have the potential for significant problems in the farming economy?
00:15Yes, for sure. The price of fertilizers such as urea and ammonia and nitrogen fertilizers have increased significantly from around
00:23$300 per ton to more than $650 per ton.
00:27But those are not the only fertilizers that we consume, and so far the increase in prices will be painful
00:37for farmers, but perhaps not lead to a decrease in production.
00:41What we see on the market is that the price of corn and wheat has barely changed since the conflict
00:47started up around between 4% and 6%.
00:49The price of soybean, another key farming commodity, is flat since the conflict started.
00:55Actually, the price of rice, which is key for feeding about half of the world's population, is down since the
01:02war started.
01:03So talking about a food crisis on the back of the war between the United States and Iran, I think
01:09it's way too premature.
01:11I suppose when does that change?
01:14You point in the piece to the longer-term consequence of disruption to those key fertilizers and other important raw
01:19materials.
01:20How at risk are those supplies if we don't see a resumption of shipping out of the region?
01:25I think that the two channels that we're going to see where we see the impact of the war into
01:31the agricultural market is going to be, one, via the fertilizer cost.
01:35And certainly fertilizer prices for urea and ammonia have increased quite a lot in the last few weeks.
01:41That can continue increasing over the next few months if we don't have supplies from the Strait of Hormuz coming
01:48into the market and we face a gas shortage in markets like India and Pakistan.
01:53The other potential problem is diesel.
01:56Machinery for the agricultural industry runs on diesel, tractors, combines, planters.
02:01And if we have actual shortages of diesel, if the farmers cannot really run the machinery, that will be to
02:08me the biggest concern is a shortage of diesel for farmers where then we will see a problem.
02:15And it's also a market that is receiving a shock.
02:18I will be very worried if we have another shock hitting the market.
02:24And typically for farming, the big shock is the weather.
02:26If we have bad weather in any part of the world over the next six to 12 months, that will
02:31be bad news.
02:33Of course, this is a global issue, but where should we expect to feel the effects first?
02:39And I suppose from a European perspective, how exposed or at risk are you going to European food production going
02:45to be down the line?
02:47For now, I don't see any problems for food production in Europe.
02:50This is not one of those big crises like 2007, 2008.
02:56Inventories of key food commodities, particularly wheat and rice, are far more comfortable than they were in 2007 and 2008
03:04when we saw a big increase in the cost of food.
03:06So I don't see a problem at the moment in Europe.
03:10The region to watch, the region that can see some problems down the road will be Southwest Asia.
03:16So looking at Pakistan and India, and they're the two key crops to watch, wheat in Pakistan, rice in India
03:23over the next few months.
03:24But for both countries, and particularly for India, I think that right now, the biggest issue will be that we
03:31have a bad monsoon on top of very high fertilizer prices.
03:35I don't think that the high cost of fertilizer on its own is going to put the price of key
03:41commodities up for food.
03:43Well, the key commodities in the food industry is sharply higher.
03:46We've got to go to Florida.
03:47We've got to find the future of the company Señorails, we've got to go to the summit.
03:47In fact, that's going to go.
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