“Producers in economies that resist the temptation of export restrictions gain pricing power in global markets,” said Frederic Neumann, a co-head of global research Asia at HSBC Holdings plc. This has helped drive a 17% gain in the shares in Australian food ingredient trader GrainCorp Ltd, versus a 15% drop in MSCI Inc’s global equity gauge. An export halt may lead to higher global prices given that India is the world’s biggest sugar exporter after Brazil. Food service distributorsOther beneficiaries of rising commodity costs are food-distribution stocks such as Sysco Corp, US Foods Holding Corp and Performance Food Group Co which provide food and kitchen supplies to restaurants, hospitals, hotels and schools. “With rising prices and food shortages leading to more protectionism, the protectionism only causes further supply imbalances and shortages, which lead to even more price increases.”

Source: The Edge Markets May 28, 2022 15:44 UTC