Quantum Wealth Summary

 

  • Russia and Ukraine are major exporters of staple foods and commodities.
  • As the result of the ongoing conflict, we are experiencing a supply chain disruption that is leading to a new wave of global hunger.
  • Could speculative investors help solve this problem by investing in an Australian food company that provides a critical service in this area?

 

 

Being hungry. Being empty. Having a growling stomach.

For most of us, this is what we feel when we skip breakfast or miss lunch because of our busy schedules.

It’s a minor discomfort. A minor inconvenience. And it’s easily solved once we catch up on our next meal.

However, for millions of people in poorer nations, hunger has more profound consequences. It can lead to malnutrition. It can lead to disease. It can lead to death.

This is the looming danger that we’re seeing right now: a food crisis emerging in the Third World.

The problem first started when the Covid pandemic hit us in 2020. Do you remember what it was like? Manufacturing was shut down. Freight was paralysed. Distribution channels faced bottlenecks.

Ultimately, we fell victim to what’s known as just-in-time production — or JIT. This is where products are manufactured and packaged to meet the needs of the moment rather than the needs of the future.

So, with JIT, there is no surplus. No stockpiling of inventory. No future-proofing.

This became a recipe for trouble.

The turning point came on 24th February, 2022. That’s when Russia invaded Ukraine. This event well and truly pushed the global economy over the edge.

We’ve seen inflation skyrocket — in particular, the price of staple foodstuffs like wheat, maize, and barley.

 

Source: Phys

 

Here’s what’s at stake now:

  • Russia and Ukraine produce roughly 30% of the world’s wheat supply.
  • 20% of human calorie consumption is dependent on wheat. Wheat is found in our bread, biscuits, pasta, noodles, and cereal.
  • Since February, News Corp Australia reports that over 1 million tonnes of grain have been stuck in the cargo ships trapped within Ukrainian ports. This food is likely to spoil and go bad by the end of May.
  • To make matters worse, Ukrainians railways are under constant attack by Russian forces. This is crippling the distribution network for grain even more.
  • In addition, Russia is amping tensions up further by restricting the export of fertiliser products like potash, ammonia, and urea. This is forcing farmers in countries like Brazil, Zimbabwe, and Kenya to scale back their use of fertiliser. This will result in less growing. Less harvesting. Less food on the table.

So, the cost and availability of agriculture is tipping the world into a hunger crisis. And the people who stand to suffer the most? Well, those living in poorer nations.

Dr Sergey Sukhankin, an analyst at the James Foundation, says that this situation has the potential to create ‘major socio-economic earthquakes in the Greater Middle East and parts of Africa.’

This is shocking. Cruel. Catastrophic.

But, fortunately, it’s not all doom and gloom.

One Australian food business stands ready and willing to step into the gap. In light of recent events, it is actually increasing in strategic importance when it comes to agriculture.

So, could this Company actually be part of the global solution? Is this the way to address the hunger crisis? Could it deliver profitable upside for savvy investors?

Let’s take a deep dive into what this Company has to offer…