Missing wheat from the war is less than 1% of global wheat crop • Hacker News Board

Re: Missing wheat from the war is less than 1% of global wheat crop

#11

Post by drexlspivey » Thu, Mar 31, 2022, 2:42 PM UTC

blaser-waffle wrote: post #6

mooreds wrote: post #4

Earlier quoted context omitted.

If the shortfall in exported wheat is ~1% of global production, and farmers in other countries (India, USA) already are planting more to make up for it, what is preventing Egypt and others from importing from those other countries to replace Ukraine/Russian exports? What am I missing?

Political will, removing subsidies for farmers, logistics of actually shipping wheat, climate change, etc.

How is climate change preventing Egypt to import wheat from India instead of Russia?

Re: Missing wheat from the war is less than 1% of global wheat crop

#12

Post by phreeza » Thu, Mar 31, 2022, 2:44 PM UTC

ginko wrote: post #3

That's nice and all but it doesn't really help countries like Egypt that import over 60% of the wheat they consume.[1] [1] https://theconversation.com/russia-ukraine-crisis-poses-a-se...

Presumably they already bought wheat futures for a significant fraction of demand, and so it is up to the sellers to organize the actual wheat, possibly at a loss.

Re: Missing wheat from the war is less than 1% of global wheat crop

#13

Post by awb » Thu, Mar 31, 2022, 2:46 PM UTC

mooreds wrote: post #4

ginko wrote: post #3

That's nice and all but it doesn't really help countries like Egypt that import over 60% of the wheat they consume.[1] [1] https://theconversation.com/russia-ukraine-crisis-poses-a-se...

If the shortfall in exported wheat is ~1% of global production, and farmers in other countries (India, USA) already are planting more to make up for it, what is preventing Egypt and others from importing from those other countries to replace Ukraine/Russian exports? What am I missing?

The author frames the problem less as a wheat production problem and more as a shipping problem.

> Again, specific places are facing EXTREMELY REAL wheat supply problems. MENA usually sources from Ukraine. Switching supply chains to India & other sources takes extra time, & if they're further away from India and Ukraine, it takes longer for supplies to get there.

FYI, MENA = Middle East / North Africa

> What these places are facing is a SHIPPING shortage. Not a lack of enough wheat in the world. Their food supply chain problems are still dangerous. A local, shipping-induced shortage that lasts a week can still kill you.

Re: Missing wheat from the war is less than 1% of global wheat crop

#14

Post by pempem » Thu, Mar 31, 2022, 2:50 PM UTC

awb wrote: post #13

mooreds wrote: post #4

Earlier quoted context omitted.

If the shortfall in exported wheat is ~1% of global production, and farmers in other countries (India, USA) already are planting more to make up for it, what is preventing Egypt and others from importing from those other countries to replace Ukraine/Russian exports? What am I missing?

The author frames the problem less as a wheat production problem and more as a shipping problem. > Again, specific places are facing EXTREMELY REAL wheat supply problems. MENA usually sources from Ukraine. Switching supply chains to India & other sources takes extra time, & if they're further away from India and Ukraine, it takes longer for supplies to get there. FYI, MENA = Middle East / North Africa > What these pl…

A sincere question:

Would it not then be helpful to support these new or temporary supply chains as a war effort? Shouldn't that fall under humanitarian aid?

Re: Missing wheat from the war is less than 1% of global wheat crop

#15

Post by woeirua » Thu, Mar 31, 2022, 3:07 PM UTC

mooreds wrote: post #4

ginko wrote: post #3

That's nice and all but it doesn't really help countries like Egypt that import over 60% of the wheat they consume.[1] [1] https://theconversation.com/russia-ukraine-crisis-poses-a-se...

If the shortfall in exported wheat is ~1% of global production, and farmers in other countries (India, USA) already are planting more to make up for it, what is preventing Egypt and others from importing from those other countries to replace Ukraine/Russian exports? What am I missing?

The physical wheat may exist, but it may not be possible to supply it at the same prices (especially given increased transportation costs due to energy prices). There may be no physical shortage, but if prices for wheat increase 50% in Egypt then many people will go hungry.

Re: Missing wheat from the war is less than 1% of global wheat crop

#16

Post by csee » Thu, Mar 31, 2022, 3:09 PM UTC

I quickly googled what the annual wheat exports from Ukraine and Russia are and got a much bigger number than the tweet suggests.

Re: Missing wheat from the war is less than 1% of global wheat crop

#17

Post by RcouF1uZ4gsC » Thu, Mar 31, 2022, 3:09 PM UTC

ginko wrote: post #3

That's nice and all but it doesn't really help countries like Egypt that import over 60% of the wheat they consume.[1] [1] https://theconversation.com/russia-ukraine-crisis-poses-a-se...

As an aside, I found that fascinating that Egypt is such a huge grain importer.

In the ancient world, Egypt was one of the largest grain producers and basically fed the Roman Empire.

Re: Missing wheat from the war is less than 1% of global wheat crop

#18

Post by groby_b » Thu, Mar 31, 2022, 3:12 PM UTC

VLM wrote: post #7

The point is the economy is currently based on something hits the news, hoard hoard hoard, price explodes, empty shelves and high profits. Happened to TP a couple years ago and is in process with microcontroller chips and will be happening soon with food. People hear story on news, think there will be empty shelves, buy a multi-year supply of boxed Mac n Cheese, the shelves are indeed empty, more people think there w…

> The point is the economy is currently based on something hits the news, hoard hoard hoard, price explodes, empty shelves and high profits.

Given that that extends well beyond individual behaviour (Wheat futures[1] are currently bonkers), this raises the question if the claim that "capitalism is the optimal way to allocate resources" is really true at least for the current version of capitalism.

This extends well beyond wheat. Market behavior is often completely irrational, for extended periods of time. The idea that "all information is priced in" extends to entirely made up information of any kind, which, given technology's ability to proliferate information, now means it often outnumbers actual information significantly.

This means that the markets often don't reflect a fair price for the product any more. They instead show a price that is an excellent representation for human emotions around the product.

That does not seem a sustainable principle, in the long run.

I wish I could close with a lovely "and here's how we fix that" paragraph, but it's a problem that leaves me stumped.

[1] https://www.cnbc.com/quotes/@W.1

Re: Missing wheat from the war is less than 1% of global wheat crop

#19

Post by BasilPH » Thu, Mar 31, 2022, 3:14 PM UTC

ginko wrote: post #3

That's nice and all but it doesn't really help countries like Egypt that import over 60% of the wheat they consume.[1] [1] https://theconversation.com/russia-ukraine-crisis-poses-a-se...

She talks about this further down in the thread, making it her main point:

> Again, specific places are facing EXTREMELY REAL wheat supply problems. MENA usually sources from Ukraine. Switching supply chains to India & other sources takes extra time, & if they're further away from India and Ukraine, it takes longer for supplies to get there.

and

> To solve that problem, we gotta start with being clear on what the problem IS!

> We haven't! We decided it's a wheat shortage, not a shipping shortage.

> So investors panicked, drove up the price of wheat, & made it even harder for these places to get new import shipments launched

Re: Missing wheat from the war is less than 1% of global wheat crop

#20

Post by lambic2 » Thu, Mar 31, 2022, 3:15 PM UTC

I don't understand why she mentions "most of the world plants wheat in the fall" if, as far as I understand, Ukraine plants their wheat in the spring. Since 1) we're in the middle of their planting season 2) Ukraine produced 40 million tons of wheat last year 3) Given the current situation it's very hard to predict how much wheat will be successfully produced this year - It looks like the majority of farmers won't be able to grow their crops - how is she so sure about the 7 million ton shortfall figure? It seems reasonable it will be closer to 20-30 million ton shortfall for this year/next year unless I'm missing something.