Will the next crisis be prandial?
Gillian Tett worries it will. And so does Goldman Sachs:
We think we could go into crisis mode in many commodities sectors in the next 12 to 18 months . . . and I would argue that agriculture is key here.
Commodity shocks don’t only happen in oil. Rising food prices pack a powerful political punch in the developing (or partly-developed) world, to a degree sometimes underappreciated by the pampered west, argues Tett.
Jeff Currie, head of commodities research at Goldman, sees this as part of a bigger problem in capital and resource allocation. If the world were a rational economic place, then regions such as the Gulf which are food-constrained ought to be investing heavily in agriculture. And since the US is the world’s biggest agricultural supplier, this implies that the Saudi Arabians, say, should be snapping up farms in Wisconsin - as America secures oil in the most efficient manner by sending teams of Texans to Riyadh....MORE