So we just talked with will about how energy prices
could likely go up. But many people believe that
food prices could be an even bigger crisis for the
world. Can you explain? Yeah and that's partly
because prices of food were already very high on historic
levels. Frankly, before Russia invaded Ukraine, you
mentioned that U. N. Food and Agriculture Index
, it's already at the highest levels. It's been
since 2011. And remember what was going on in
2011 we heard Arab Arab Spring sweeping across the Middle
East And in part food inflation was a really key
part of that story. So we expect prices to
move even higher. Russia. Ukraine really key to
producing a lot of the food products grain responsible for
more than 25% of those cargoes shipped to the markets
particularly strong in this region. We're looking at corn
. Nearly a quarter of the corn trade comes from
these two countries. So those are things you could
really see in your pocketbook if if this crisis continues
and Simona. It's not even in the short term
I mean it's the longer term impact as well because
as you mentioned I mean we're coming up on spring
time when these farmers are planting. So prices are
not likely to abate anytime soon for consumers. Right
. Right. Yeah. This is absolutely going to
disrupt the key part of the planting season in Ukraine
and Russia. And the fact that ships aren't even
going there. People aren't even doing business. Even
if suddenly ports were to open up in a couple
of months, there might not be crops in the
ground and then the crops in the ground might not
be there in part because the farmers didn't have money
to go and put them in the ground even if
their area where they were was safe. But yeah
, I mean when you look at the long term
, people can deal with high prices for a moment
, say, but when a government is forced to
eliminate its subsidies on bread prices, something Egypt has
considered that has a longer term impact and it's going
to change consumer behavior on the ground and then add
that into a rising energy bill. And this is
kind of a real recipe for concern here. Right
and Simone, do we know where this is going
to be felt the hardest by consumers? I mean
you're in Doha, I'm in new york. What's
your outlook when you look at some of the prices
? Well, wheat has been the one that's really
in focus and we've seen buyers of wheat from this
region in particular. Egypt Jordan's go to the market
and they have actually failed in some of their offers
or their tender offers because the prices that come back
to them simply too high or there are no offers
at all in terms of getting wheat, those,
they have some stockpiles of wheat hanging out in the
background, but those will last a certain amount of
months. So then they're going to be looking to
countries elsewhere in the world to try and meet that
gap. How much extra product is out there is
really the concern. Canada, for example, had
a pretty minimal crop come in because it had particularly
dry conditions and you can't change things like the weather
. These are long term things that take a long
time to play out and be felt absolutely. There's
wheat and then there's oil, of course we have
eat in Ramadan coming up. So a lot of
concern as people are using these products.