Happy Monday, Food inflation has been a hot topic for months now as prices from the grocery store to restaurants rise. Although that trend was already in play off the back of the pandemic recovery, the war in Ukraine has added extra pressure. Together Russia and Ukraine make up over a quarter of the world’s grain supply. It’s an issue that has caught the attention of leaders around the world. Even BOE Governor Andrew Bailey pointed to the outlook for food prices as a major worry. Today’s Chart of the Day looks at Chicago wheat futures that are returning to levels last seen at the start of the Ukraine war. This time, the move comes from India. India banned wheat exports to manage its own food security. Although it isn’t even one of the biggest players in the wheat market, in the absence of Ukranian/Russian supply and an American crop forecasted lower by the USDA, India was seen as the answer. The concern now is what if every country starts changing policy to secure food domestically? For countries like Egypt where bread is a staple, this is a major issue and can bring about political chaos. For Americans, it likely means even higher prices.
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