Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

Wheat futures prices are up 60% so far this year, and after a heat wave damaged crops in India,

the country announced last week an immediate ban on wheat exports.

The Indian government said that a spike in prices is threatening the security of a vital

commodity, both for India and for other vulnerable countries. India is the world's second

biggest wheat producer after China.

Thanks in part two, a bumper harvest last year, they had been able to fill the gap in

markets left by decreased output from Ukraine, even as bad weather reduced the crops of

the other big grain exporters.

In the global food system, supply demand problems were previously mostly down to weather

and other supply-related factors. In the last few years, the global pandemic tested and in many

ways proved the resilience of the global food supply system. But now with the war in Ukraine,

we're seeing severe problems in the global

food supply chain, and it's difficult to predict the medium or long-term implications.

These new issues are occurring on top of an already tight but at least functional food

supply chain. Before the war in Ukraine, food prices had already

risen 18% over the pandemic. Globally, there are six breadbasket countries that together

supply roughly two-thirds of global agricultural commodities. Ukraine has long been one of the most important of these countries,

producing food not just for its own population but for people around the world. Additionally,

Ukraine produces a lot of fertilizer. Fifty-seven percent of the land in Ukraine was used for

growing crops in 2019, making it one of the most highly cultivated countries in the world.

By comparison in the same year, the United States actively used 17% of its land for cultivation.

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