Larry Fink, managing director of BlackRock, recently warned of sharp increases in oil and metal prices, due to Russia’s invasion of Ukraine. Today, it is the lasting and more dangerous impact of food inflation that holds his attention, as well as that of Bill Gates. Will they save the world from a serious food crisis?
A red flag from BlackRock
BlackRock is a huge American investment fund, the largest asset manager in the world. Founded in 1988 and established in 38 countries with nearly 16,000 employees, BlackRock today manages nearly $7 trillion in assets worldwide. This investment fund would particularly like to see the establishment in France of a funded pension system, alongside the pay-as-you-go system.
BlackRock’s CEO recently said: “The only thing that worries me and that we don’t talk about enough is food”, in an interview with the Financial Times. And to add: “It’s not just an inflation-related concern. There are also geopolitical concerns that flow from that.”
Prices for oil, gasoline, fertilizers and agricultural products soared earlier this year when Western countries imposed sanctions on Russia after its invasion of Ukraine.
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An economic, energy and food crisis
Wheat and sunflower oil costs have also skyrocketed, with Ukraine being a major exporter. This week, oil prices have started to fall back to pre-invasion levels as traders brace for a sharp drop in demand, but food price inflation remains high.
U.S. Consumer Price Index figures for June show the price of chicken and flour each up nearly 20% from a year earlier, and margarine jumped 34 %.
“We talk a lot about gas prices because that’s what affects Americans, but the biggest issue is food”Mr. Fink said. “There has been a huge destruction of arable land in Ukraine. […] Globally, the cost of fertilizers has increased by almost 100% and this additional cost is reducing the amount of fertilizer used in agriculture. This is affecting the quality of crops around the world.”he explained.
Although lower crude oil prices have started to affect the price at the pump for motorists, consumer goods companies continue to see high input costs. Any decline in fertilizer prices may come too late to boost this year’s food harvests.
As a reminder, after the invasion, the World Bank predicted that world food prices would increase by 20% this year, far exceeding those of raw materials.
The United States and Bill Gates want to “help”
Janet Yellen, US Secretary of the Treasury, said on Friday July 29 that the world is facing “an extremely difficult time for global food security”and urged key G20 nations to end stockpiling and food export restrictions, as well as provide additional financial assistance to countries and people facing food insecurity.
Bill Gates, billionaire and co-founder of Microsoft — who has had a controversial role during the Covid crisis, being one of the WHO’s biggest funders and vaccine makers through his Gavi Foundation — voiced similar concerns this week. He said the reduction in supplies of wheat, edible oils and other foodstuffs caused by the war in Ukraine “raise food prices, which will increase malnutrition and instability in low-income countries”.
He noted in a blog post that improving agricultural productivity in Africa requires “much more investment.” A project that Emmanuel Macron has been undertaking since October 2021, with the Africa-France Summit and the “FARM” program.
Read also: France-Africa: Macron lectures to counter the influence of Russia
For his part, Bill Gates owns nothing less than hundreds of thousands of hectares spread over 18 states in the United States. As France Inter reports, “its largest properties are in Louisiana (28,000 hectares), Arkansas (19,000 hectares) and Nebraska (8,300 hectares). All of these lands represent a capital of approximately 700 million dollars”. Will he become the first farmer in the world? Once again, he seems to be one step ahead…