Today concluding my review of this piece about the Ukrainian export grain wilting on the vine (sorry for mixed metaphor). Basically, there are some 20 million tons of wheat languishing at the port, and it’s Russia’s fault that it cannot swim out to feed the hungry world.
Russians retort that (a) some of the grain is getting out, via ports in Romania and Moldavia, and (b) it’s the Ukrainians own fault that the rest of it is stuck, since ’twas they who mined the Odessa port in the first place. For me, though, the most interesting was the discussion of overall economic models of growth and export of this valuable commodity. In the final section of his report, analyst Nikolai Storozhenko discusses the situation in Russia, which is also not so rosy:
In the current “marketing” (fiscal?) period from July 1, 2021 through March 10, 2022, grain export from the Russian Federation comprised 28.1 million tons, which is 30% lower than prior-year indicators. Also, starting in the middle of March, exports of grain and sugar from Russia will be restricted by governmental decree. Exports of these key commodities will be permitted only by licensing and in accordance with quotas. These restrictions are obviously connected with the “Special Military Operation” in the Ukraine. And by the same token, 20 countries throughout the world have imposed such restrictions. For example, India is currently discussing internally, whether to impose a ban on exporting wheat. Obviously the nations of the world are very worried about feeding their own people, and thus trying to conserve what they have. There is a kind of panic afoot, and it doesn’t help that certain importers are making the situation worse by refusing (for political reasons) to import Russian wheat. Basically, at the larger world level there is no real substitute for Russian and Ukrainian wheat.
As the price of grain rises, also feeding into the problem is the rise of costs, especially the cost of fuel. Grain doesn’t just spring out of the ground without lots of fuel to assist it: Tractors, combiners, trucking, tankers, etc. Also factor in the jump of prices for fertilizer, which uses natural gas as an ingredient. [Really? I didn’t know that…]
In conclusion: Don’t blame Putin for this crisis. Instead, blame the United States, with their stupid economic sanctions. Which began, one has to remind, long before the Russian incursion into the Ukraine. It is never too many times to keep reminding about North Stream 2 pipeline: If the Americans had not blocked it, for selfish economic reasons of their own, then the prices of gas in Europe would be way cheaper, and same thing with fertilizer. And prices would be lower still, if Russian ships were allowed to freely bring their fertilizer products into European ports. Not to mention, that the war itself would not have happened, had Joe Biden pursued a more intelligent policy, instead of arming Ukrainians to the teeth and pushing them into war.
Biden and his administration believe that the key to solving “produce inflation” consists of releasing those magical 20 million tons of Ukrainian grain. But that is not factual. The key to solving this problem consists in one simple fact: The global economy is ill-suited to sanctions wars and does not respond well when certain nations try to exclude other nations from this economy.
yalensis: That is the end of Storozhenko’s analysis. I just conclude with a thought of my own. Joe Biden is obviously being deceitful, in trying to blame Russia for the world impending food crisis. He surely knows better [?] than to attribute so much magical power to 20 million tons of grain.
And obviously, he is counting on the ignorance of Americans and Europeans to believe this B.S. But there is a deeper issue here, which involves different types of “magical thinking” that have become prevalent in Western societies. This goes to the issue of “perspective” which we discussed earlier.
There is a type of “magical thinking”, and I don’t know if there is a specific word for it, which involves taking a very broad panorama, then zooming in to a single dot, and believing that one dot to be the essence of the entire picture. We have seen a lot of this fallacy on the Ukrainian side of this war, for example, obsessing about individual incidents (the sinking of the “Moskva”, the trapped fighters in Azovstal, the ponton river crossing, etc.), to the exclusion of all other events and not paying attention to the larger picture.