Frederic Neumann

The most impacted economies like Bangladesh, Sri Lanka, Thailand, Vietnam, Philippines, those are economies where obviously people have lower incomes and immediately the rise in gasoline, for example, diesel impacts your spending decisions.

Now, why this also matters for the broader region is that many economies like Thailand, for example, are major exporters of agricultural goods, of rice, for example.

And as they have lack of diesel, lack of fertilizer, not only prices going up in Thailand, but also food prices across the region are likely to go up.

And so that immediately then hits spending and the cost of living in other economies, including the richer ones that import rice from Thailand.

That's right.

But we even worry about the summer harvest season, the fall harvest season, right?

So some of the stuff that's being planted now will be harvested later in the year.

And that's already where you see lack of fertilizer.

So the crop yields might go down.

But also then there's a question of diesel.

We have a diesel shortage across Asia.

A lot of the agricultural machinery runs on diesel now.

You need to transport the agricultural goods to market.

That's more expensive.

So it's the entire supply chain.

And so if you have rising food prices in places like India, for example, this will be felt across the world, including in the U.S., by higher food costs.

And that's going to be felt later this year and potentially well into 2027.