CHART OF THE DAY: The food glut charts

What it means
One of the enduring reader requests among our daily charts is for an update of the annual Food Glut series. As a reminder, once a year we show capital expenditure in the agricultural sector as a share of total agricultural value-added – i.e., the sectoral investment/GDP ratio – for India, China and Russia, the three major EM countries that have data available (unfortunately, the Brazilian authorities don’t report fixed investment from the national accounts, otherwise we could show “BRIC-wide” figures).




Those data are reported with roughly a 12-month lag, and so here are the updated numbers through the 2010 calendar year. In Chart 1 we show the average for all three economies, and in Chart 2 below we show the individual country trends.


As you can see,
• EM agricultural investment spending has never been higher, and indeed is orders of magnitude larger than during the previous food price boom in the mid-1970s, and


• The aggregate investment ratio continued to accelerate right through the crisis and the post-crisis period. (This is particularly true for India and China, while Russian investment was clearly impacted by the dramatic financing recession in 2009-10).


To read full report: FOOD GLUT CHARTS
RISH TRADER