As the World Food Programme warns, “High fertilizer prices could turn the current food affordability crisis into a food availability crisis, with production of maize, rice, soybean and wheat all falling in 2022.”
Chemicals and the Economy
Food costs and interest rates rise as energy and fertilizer supplies are hit by the invasion
It’s going to be a very difficult winter. Most of the world will be impacted as Europe bids up energy/food prices to keep its people warm and fed. And it would never have happened if policymakers had recognised the importance of geopolitics, energy markets and demographics.
Jackson Hole is a chance to prepare for a financial shock
The problems began with the supply chain crisis caused by the pandemic. Russia’s war in Ukraine then created a further challenge. And now we face the risk of famine as fertiliser costs become unaffordable. Central bankers at their annual Jackson Hole get-together should therefore focus on preparing for the arrival of a potential Fourth Horseman of the Apocalypse, in the shape of a major financial crisis.
Energy market chaos highlights risks to the global economy, as US consumer sentiment hits all-time lows
Consumer sentiment is already at all-time lows. Rising energy, transport and food prices will likely soon push inflation above 10%, and interest/mortgage rates to 5%+, adding to the risk of a major and long-lasting downturn.
World Bank, IMF warn of famine risk as Russia’s war hits wheat output and hikes fertilizer costs
Essentially, the problem is a timebomb which is set to explode next winter unless governments work together to increase arable planting, establish emergency stocks, and subsidize fertilizer costs whilst gas prices remain at today’s record levels.
Russia’s chemical production continues to grow
Russia has been the great exception in regional chemical markets. Normally, production growth starts at a high level, often 15% a year or more, and then slows as markets become more mature. But in Russia, output collapsed with the Berlin Wall after 1989, and growth was actually negative until the mid-2000s. Since then, there has […]
Russia’s chemical output begins to improve
In May last year, the blog was hopeful that the major decline in Russian chemical production might start to reverse. And recent ACC regional production figures have indeed shown a welcome improvement in Central and Eastern European output, which was badly hit by the 2008-9 collapse. Once again, the blog is grateful to Sergei Blagov […]
Russia’s chemical production tumbles
Last week’s global production numbers highlighted the startling collapse in output from Central & Eastern Europe. This was the worst regional performer in Q1, and the blog decided to investigate further. Russian output is key to the region’s performance. And the chart, based on data kindly provided by ICIS’s Sergei Blagov, shows how all parts […]
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