As countries worldwide take measures to secure domestic food supplies, many are increasingly taking a nationalistic approach, at least temporarily.

• Khazakastan has banned the export of wheat flour, carrots, sugar and potatoes, after having previously stopped the export of staples, such as buckwheat and onions.
• Serbia has stopped the export of its sunflower oil and other goods.
• China, the largest grower and consumer of rice has pledged to increase its purchase of its domestic harvest, despite having stocks of wheat and rice for a year.
• Vietnam has temporarily suspended new rice export contracts.

The hoarding of food supplies combined with protectionist policies could lead to higher food prices, which will make policy makers panic even more, which may lead to a self-perpetuating cycle.

Global inventories of staple crops like corn, wheat, soybeans and rice are plentiful and once consumers see more products on shelves, they may stop hoarding, which result in governments easing off measures.

The increase in the US dollar against emerging-market currencies may reduce their purchasing power. Therefore, potential global trade disruptions will affect least-developed countries with weak currencies the most.

Read the full article here (Bloomberg.com – 25^th March 2020)

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