Pay debt or feed people is hungry nations' impossible choice

30/5/2022 4:49:00 PM

Global Economy: Pay debt or feed people is hungry nations' impossible choice - Bloomberg

Global Economy: Pay debt or feed people is hungry nations' impossible choice - Bloomberg

LONDON/SINGAPORE (May 30): After Sri Lanka defaulted on its debt, Jack McIntyre, a portfolio manager at Brandywine Global Investment Management, started watching rice and grain prices more closely.For a swathe of the markets he is tracking, global food shortages are presenting governments with a stark choice — pay their debts or feed their people.Sri Lanka opted for the latter, falling into arrears on its foreign debt on May 18 amid a lack of dollars to ease shortages of everything

LONDON/SINGAPORE (May 30): After Sri Lanka defaulted on its debt, Jack McIntyre, a portfolio manager at Brandywine Global Investment Management, started watching rice and grain prices more closely.For a swathe of the markets he is tracking, global food shortages are presenting governments with a stark choice — pay their debts or feed their people.

Sri Lanka opted for the latter, falling into arrears on its foreign debt on May 18 amid a lack of dollars to ease shortages of everything from food to fuel, and bets are high that others may follow. Fifteen emerging market nations now trade with debt at distressed levels, or a risk premium of more than 10 percentage points. Four of those nations are in Africa, where one of the steepest run-ups in food prices is taking a toll.

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A LONDON/SINGAPORE (May 30): After Sri Lanka defaulted on its debt, Jack McIntyre, a portfolio manager at Brandywine Global Investment Management, started watching rice and grain prices more closely.A (May 30): The company’s founder and Chief Executive Officer Masayoshi Son kept his pay unchanged at 100 million yen (roughly $785,000), however some of his top executives whose compensation was made public through a company filing on Monday saw big drops following a record $20.A TAIPEI (May 29): Taiwan's worst Covid-19 outbreak has left the island's insurers bracing for more than US$1 billion in claims that the financial regulator is urging them to honour.The Kedah Health Committee chairman said this marked a 49% increase, or 388 cases, from the previous week.

For a swathe of the markets he is tracking, global food shortages are presenting governments with a stark choice — pay their debts or feed their people. Sri Lanka opted for the latter, falling into arrears on its foreign debt on May 18 amid a lack of dollars to ease shortages of everything from food to fuel, and bets are high that others may follow. Chief Financial Officer Yoshimitsu Goto made 293 million yen, down almost 40% from the previous year. Fifteen emerging market nations now trade with debt at distressed levels, or a risk premium of more than 10 percentage points. There are currently more than 6. Four of those nations are in Africa, where one of the steepest run-ups in food prices is taking a toll. Both long-serving lieutenants have helped lead SoftBank’s multiple reinventions, from broadband provider to telecom operator to the world’s biggest tech investor. "The default in Sri Lanka made me nervous," McIntyre said. With this increase, the cumulative total HFMD cases in Kedah this year is 3,403 cases, an increase of 2,628 cases compared to the same period in 2019.

"You don't have to drive, heat your home, but you have to eat. in February, earned 1.6 billion (US$89 million) — than the NT$2." With memories of the Arab Spring unrest in the early 2010s in mind, investors are fleeing emerging market nations threatened with crippling food shortages and uprisings. Russia's invasion of Ukraine disrupted vital supplies of food staples, adding to problems caused by extreme temperatures and elusive rain in breadbaskets from the Great Plains to the Horn of Africa. Segars received 1. Indeed, food prices have skyrocketed by more than 30% over the past year, according to a United Nations measure. Speaking to lawmakers, Huang said payouts will likely be higher than the NT$41 billion estimate mentioned by lawmakers. That is all the more striking when you consider that in the two decades through 2020 they rose an average of 4. Ronald Fisher, Son’s long-time lieutenant who also stepped down from his role leading the Vision Fund’s US arm in April, earned 126 million yen during his time as a board director last year from April to June 23.2%).

3% every year. Market meltdown The countries that are most affected — and least able to cope — are those in the developing world. SoftBank did not disclose what compensation former Chief Operating Officer Marcelo Claure, previously one of Son’s most trusted allies and highest-paid executives, received before his departure earlier this year. Risk models Property insurers, which focus primarily on car protection, have struggled to find growth in recent years and saw Covid-19 as a great opportunity, according to Andy Chang, director of Taiwan Ratings Corp. For these nations, food is almost a third of current year-on-year headline inflation gauges. In the US, the UK, and much of Europe, food accounts for 10% or less of similar measures.8 billion yen in the prior year. Desperate measures like India's move to restrict wheat exports, announced earlier this month, will add to global price pressures, thwarting efforts by central bankers to subdue them. "They shouldn't have just said, 'How much are our competitors selling? We want to sell that much too,'" Chang said in a phone interview.

And protests against domestic pain have the potential to spread. Both departed SoftBank’s board in November 2020. "The markets have firmly underestimated the implications of the rise in input costs," said Luiz Eduardo Peixoto, emerging markets economist at BNP Paribas Markets."We are particularly concerned about food inflation. 31 as a selloff in tech shares deflated the value of its portfolio companies, including public holdings like Coupang Inc. The generosity of the policies insurers sold is a major part of the problem. The repercussions of the increase in the cost of food will be seen in the next few months, causing a dramatic increase in global inflation." Not that prices have not already taken a hit. The Japanese tech investor earlier this week named venture capitalist David Chao to join its board as it tries to regain its footing from money-losing investments.

Debt of developing nations in dollars has lost 15% so far this year while local-currency obligations are down 7%, with both trading near early 2020 levels, according to Bloomberg indexes. For as little as NT$666 a year, the insurers guarantee to pay out NT$50,000 if the customer is required by the government to isolate. The MSCI gauge of emerging market stocks has lost 14%, trading near the lowest level since 2001 relative to US stocks. 24. And the more exposed a nation is to food inflation, the more likely it is their currency will weaken, with the Mexican peso, the Colombian peso, the ringgit, and rupiah among the most vulnerable. An important inflation report is due out of Mexico this week, with investors also watching for Colombia's presidential elections, Brazil's gross domestic product, and China's Purchasing Managers' Index. But cases began surging in late April as the Omicron variant breached the island's border controls. That makes servicing debt — particularly dollar debt — even harder, raising the prospect that developing nations lose access to markets at a time they need it most.

Yields on their dollar bonds are near the highest in two years at almost 7%, tripling a country like Tunisia's borrowing costs. Eurobond issuance by emerging market borrowers plunged 41% from last year.5 million people — could end up getting Covid-19. Meanwhile, the cost to protect the debt of speculative-grade emerging market nations has risen to match levels on par with the 2013 taper tantrum, according to Bloomberg Intelligence. "Compared to energy price shocks, food price inflation tends actually to be more pervasive and prolonged in its impact, and governments typically have fewer administrative programmes to buffer the effects on households," said Bryan Carter, head of emerging market debt in London at HSBC Asset Management. His team is cautious on the bond markets of Nigeria, India, Kazakhstan, Egypt, and Pakistan due to their large food inflation components and has ratcheted up expectations for emerging market inflation in most countries."We're all going to end up getting it — that's why I extended my policy.

What is clear to all is there is no quick fix — for food shortages or the markets' fallout. Even before the Russia-Ukraine conflict disrupted food supplies, networks had been weakened by the lingering effects of pandemic shutdowns, climate change, and the energy crisis. It is a situation that has led to hoarding on a global scale, with food-producing nations now stopping some exports and perpetuating a cycle of inflation and hunger. Subscribe to Mid-day email alert We deliver news to your inbox daily. India, the world's second-biggest producer of wheat, followed its prohibition on sales of the staple with a limit on sugar exports. Malaysia has halted the overseas sale of poultry.

Indonesia is partially stopping shipments of palm oil. Thailand and Vietnam, the world's top rice exporters after India, may also take action that could result in higher food costs for consumers worldwide. The two Asian nations should jointly raise prices to boost their bargaining power, according to Thai premier Prayuth Chan-Ocha. On the same day Sri Lanka defaulted, the UN secretary general warned that a global food shortage could last for years, spreading political upheaval and starvation. "The next aspect of that food price angle that we're going to be monitoring very closely is with regard to politics, populism, and protectionism," said Mary-Therese Barton, head of emerging market debt at Pictet Asset Management in London.

"It's a very difficult period for EM (emerging market)." Subscribe to Mid-day email alert We deliver news to your inbox daily .