8 Billion of Us on Planet Earth…

According to the United Nations, the world’s population surpassed 8 billion this past Tuesday.  While populations in sub-Saharan Africa are expected to continue growing substantially over the next 30 years, the annual global population growth rate is now at its slowest rate since 1950 – and moving into negative rates in many advanced economies.  

One of the more interesting trends in global demographics is not getting much attention: India will become the most populous country in 2023, overtaking China.  By 2050, it is estimated India's population will be 1.7 billion while China's population will shrink to 1.3 billion from its current 1.412 billion. In our view, the vaunted “China Century” is likely actually to be “the India Century.”

It didn’t even last 24 hours… Putin breaks newly signed grain deal with missile attack on Odessa

Yesterday afternoon brought news of a deal brokered by the United Nations and Turkey enabling grain shipments to resume from Ukraine. The deal was seen as going a long way to helping to ease the growing food security crisis. Less than 24 hours later, Russian President Putin broke the deal when four Russian “Kalibr” cruise missiles rained down on the port city of Odessa. Two directly hit Odessa’s port and the other two were shot down by Ukrainian defense forces.

Less than 24 hours had passed since Putin agreed to the deal. Why Russia would break the deal so quickly is still unknown - especially since Moscow’s approval of the deal was something of a small PR win. Now, by so aggressively and wantonly disrespecting the UN (not to mention Turkey), Russia further demonized itself internationally.

But we do see one reason we see for the violation: Russia is making money a lot of money on selling bootleg grains. The attack has set off wild swings in prices and probably will continue to do so for some time. We note wheat prices fell more than 6 percent on the announced deal. Now, they are spiking up again. The benefit to Russia is significant. Since seizing Crimea in 2014 and now significant portions of the Donbas - including Sevastopol — in the last four months, the flow of sanctioned Russian wheat (including wheat stolen in mass quantities from Ukraine by Russian forces) has gone up more than 50 percent.

The UN estimates there are currently 828 million people around the world going hungry of whom an estimated 40-50 million are on the brink of starvation. For Putin, keeping the wheat/grain markets off balance serves two purposes: 1) it helps further fund Putin’s war efforts, and, 2) it puts increased pressure on Western governments to step up to help those countries at most risk for food shortages.

Moreover, considering many of these countries are found in North and Central Africa, the risk of mass migration north across the Mediterranean Sea and into the EU is growing by the day. With the growing list of economic challenges, the EU is already facing due to Russia’s aggression in Ukraine, dealing with a mass-migratory crisis would be a significant political and social destabilizing issue.