An educated opinion on the current inflationary pressure on crucial goods around the world from ~Alexander Nazarov~

“World hunger is canceled this year. There will only be riots and the fall of governments. Hunger will come later.

Food prices in the world have returned to the level they were before the start of the military operation in Ukraine, or even lower.

The surge in prices in the first months of the war was caused by the actions of international financial speculators on the stock exchanges and it ended.

That is, it can be said with certainty that the war in Ukraine had no impact on prices and on the supply of food to the world. If you hear that food prices in the world are rising because of Russia, you can safely spit in the face of this impudent liar.

Then why are food prices rising in all countries?

Rising prices for raw materials and food is a long-term trend that began in the second half of 2020, but became clearly visible only a year ago, in the summer of 2021. In any case, long before the war in Ukraine.

It was during the covid epidemic that Western central banks printed a crazy amount of fiat money, more than the entire amount of quantitative easing from the beginning of the 2008 crisis to the epidemic. During the epidemic, the Federal Reserve printed about 40% of all dollars issued during the entire existence of the dollar. Naturally, this led to an increase in world prices for everything, including food.

In particular, wheat prices began to rise in August 2020, that is, a year and a half before the start of the military operation in Ukraine, and have since grown by 77%. At the same time, now they are absolutely the same as they were before the war in Ukraine.

Soybean prices also started to rise from June 2020 and rose by 70%. However, since the beginning of the Russian operation in Ukraine, soybeans have fallen in price by 5.7%.

The price of sugar from July 1, 2020 to today has increased by 43%. Now the price is about 4% higher than before the war.

The price of corn has increased by 93% since July 2020. Since the beginning of the war in Ukraine, corn has fallen in price by 4%.

The price of rice has increased by 42% since July 1, 2020. Since the beginning of the war in Ukraine, rice has risen in price by 1.3%.

We see that the prices for various types of food since the summer of 2020, thanks to the irresponsible financial policy of the West, have increased by 40-80%.

Next, consider the impact of oil prices on food prices. Or rather, the impact of possible Russian actions on food prices, because Biden keeps talking about “Putin’s jump in gasoline prices in the United States.”

Let’s not take the peak of the fall during quarantine, let’s take the price starting from October 1, 2020, when the economy and demand for oil more or less recovered. Since that date, the price of US WTI oil has risen 180% to $99 a barrel today. Since the beginning of the war in Ukraine, the price has risen by only 9.2%, despite all the efforts of the West to limit the access of Russian oil to the world market.

Why has the price risen so little? Because Russia sells a significant part of its oil to India and China at a significant discount. For example, today the spot price for Russian Urals oil is $85 per barrel. That is, Russia sponsors the world by selling it cheap oil, which makes it possible to reduce world prices for other goods, including food.

However, the recent slowdown in the growth of world food prices does not mean that they will not continue to grow, with all the ensuing consequences for the domestic political stability of various countries, primarily Arab ones.

As long as forecasts in Russia promise a good harvest, the increase in wheat harvest should offset or even exceed the decline in its production in Ukraine. And in general, Ukrainian wheat exports amounted to only about 2% of world wheat production, so even if Ukrainian grain is completely removed from the world market, this will not cause world hunger under any circumstances.

Rather, I argue that there will definitely be world hunger and the planet’s population will decrease significantly, but it will not be this year.”