Frederic Neumann

We already had expected rising food prices.

Now that we have an extra layer of very volatile weather, high temperatures, drought, that's going to just exacerbate the stress on farmers, on the agricultural sector.

Well, that's right.

war or the war that we saw in the Middle East that closed the Strait of Formosa also meant that really there was a shortage of fertilizer.

The Middle East is a big supplier of fertilizer, particularly to Asian economies.

And so for several months now, fertilizer prices were very high or fertilizer was very hard for farmers to get their hands on.

And what this means is that for the coming harvest season in the fall, we already had expected rising food prices because there wasn't just enough fertilizer to go around.

So one key economy is India.

India obviously has a population of 1.5 billion people.

About 45% of the agricultural land is still being irrigated just by rainfall.

And that means if you have lack of rain, then you have drought conditions, plus you have very high temperatures.

And that's not only important for India, but India is also an important exporter of rice, for example, of sugar, of many commodities.

And so if there is agricultural stress in India, it not only pushes up food price in India, but even affects countries that are importing food from India, such as in Southeast Asia or even the Middle East itself, parts of Africa.

So that radiates really out from India to other economies.

It's not a hypothetical risk.

We saw in the past that the Indian government restricted exports of certain goods just to keep prices domestically and supplies domestically ample.

And this year already, the Indian government actually put export restraints on sugar and

because they're worried about a lack of sugar domestically.

And so they stopped exporting.

The export ban lasts for another few months at least.