Wheat a minute

- "Recent increases in global wheat prices have reignited concerns about the economic impacts of high food prices. This article describes the economic channels through which rising wheat prices (and food prices more generally) can affect EEMEA economies, and highlights what we think will be relatively minimal short-term implications requiring limited policy response in most countries. In this context, we analyze sensitivities of inflation, balance of payments, and fiscal accounts to food price changes, particularly should the current wheat price spike translate into a broader increase in food prices."
- "We conclude that the policy responses are likely to be strongest in countries with significant economic sensitivities, relatively high poverty rates, and/or institutional challenges (Egypt, Ukraine, Kazakhstan and Russia). For the rest of EEMEA, the impact will likely be meaningfully felt only if policy-makers deem the price increases permanent, for example as a result of global structural shifts in the balance of food supply and demand."

Nomura Region View 20100812

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