The food inflation story is (was?) attractive from many different angles. Wage inflation and food inflation seem to rise in lockstep, probably reflecting rising wages driving demand, and cost of production. We also saw China emerge as the world’s largest buyer of grain, and with contaminated land, reduced fertiliser use, and a shortage of labour, looked to be only becoming a bigger buyer of grain going forward. Russia’s invasion of Ukraine made most grain supply look problematic, it would have also suggested higher prices to support domestic production. Good story in 2021, but the reality has worked out differently.
