Yes,51 days from global wheat shortage & mass hunger,No joke！

When my launched first warning on global wheat futures price hikes on later March,many folks aint take it too seriously,cos human beings tended to be content with cozy fantasies,prefered to turn away from reality and its truths, which are neither easy to live with nor pleasant to talk about.But,as an economics researcher,my job is exactly to expose the The stark, brutal truth hidding behind the Dazzling complex and massive amount datas,that is, we’re only as far as around 51 days from world wheat shortage & mass hunger,even worse,this trend highly likely would sustaine for quite some time,yep,no joking at all!

First of all,this sharp drop from global wheat stocks to Use ratio from Jan 2020,like never seen before in all history,from the chart above,we can tell nearly every critical global wheat S to U ratio sudden diving point happened on Jan or Feb,then 9 out of 10 times,wheat futures prices hikes started to rocket up from Late March to early May, then price peaks at Late Oct early Nov until late Jan even early Feb next year,meanwhile,we can also spot on Astonishing resemblance patterns on the wheat futures price Volatility curves between Feb 2003 to Mar 2008,and right now nearly vertical wheat price hike beginning from Jan 2020.In other words,this present wheat price rocket ups right before everyone’s eyes,may most likely just take off,far from reaching its peak.

Then,Fundamentally speaking,3 major existing factors would batter this already alarming situation into further accelerated deterioration:

1) Russia banned the export of fertilizers until Aug. As the world’s largest fertilizer exporter(19% to 20% global total volume,if combining with Belarus,>40% world amount), global food production will certainly decline accordingly by at least 30%,not to mention the time gap between Maritime transport(40 to 50 days to Brazil,20 to 30 days to China) and missing Optimum fertilization time (early May for wheat);

2) Regarding Ukraine, wheat is planted in September/October and harvested in July. Without pesticides and fertilizers under war conditions, it is estimated that crop yields could be reduced by at least 33%;

3) Global wheat “carry-over” (stocks) is at its lowest level since 2008 at just 16.9 million tons.

Thus,based on open datas from U.S. Department of Agriculture’s (USDA) 2019/2020 Annual Report and Food and Agriculture Organization of the United Nations (FAO),we came up this conclusion,on condition that when average global wheat S to U ratio is 35%, In addition on normal conditions, a 20% “stock ratio” is equivalent to 75 days of global wheat stocks consumed. Then considering the real-time S to U ratio for May 2022 is 33.9%,subtracting the minimum 20% current wheat stocks reduction due to multiple reasonable variables,the global wheat stock leftover,could only maintain supply for 51.88 days from now,in other words,global wheat price would largely see another pirce spike as early as Late June early July from now.

I sincerely hope,my Analysis and Forecast was wrong,cos if it turned out to be true,folks especially from Middle East (>70% local wheat depended on imports,especially from Ukraine and Russia,varies from 32% to 50% from Ukraine alone),North Africa(>2/3 local wheat consumption depended on Ukraine and Russia, 85% Egypt wheat needs relied on Russia,the other 15% from Ukraine),would suffer a lot,the global wheat price futher up 30% to 33% in less than 2 months,not simple alarmist warning！