While we still believe that $200/barrel is almost inevitable, food inflation is far more important.
First, food is a much bigger expense than % of direct spending.
Second, the US has seen $150 nominal oil before, which adjusted for inflation since 2008, bringing us straight to $200/barrel.
Third, with the planting season being off in Ukraine we are likely to see global food shortages.
What countries are at risk?
Well, Ukraine and Russia produce about 25% of global wheat and lots of eat is shipped via the Black Sea to the Middle East and North Africa…
Tough, tough situation …

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