With concerns about surging food prices recently inflamed courtesy of the series of fires in Russia and the halt of grains exports out of the country, several heavy hitters have come out recently to discuss their views. One among them is the man with the best YTD performing macro hedge fund according to Bloomberg, Hugh Hendry, who appeared on BBC's ever-informative Newsnight to discuss potash, food prices, and other scarce resources.
On whether the world is facing a massive food shortage, Hugh's conclusion is that as long as Asia does not have a recession, things are ok, otherwise "in due course there would be great pressure on the food supply." As for Potash, Hendry says that China and Canada "hate each other [in the space]. There has been a profound game of roulette - Chinese consumption of Potash is 35% less than used in Western agriculture. At these prices, the Chinese haven't been consuming in the manner in that they should and they risk an absolute collapse in their yields... China does have a vulnerability in feeding itself which we don't have because we embrace potash at productive levels."
As for geopolitics, the topic arises of what African quid pro quo demands for having the most arable land should be and sending products over to China. The observation is that Africa's bargaining position is negligible (those Goldman offices in Ethiopia, protecting the interests of the locals, are oddly missing).
All this and more in the below clip: