Here’s the best place to hedge severe El Niño shocks to the food supply chain, BofA says
One country appears to be the best place to hedge market impact from severe El Niño shocks to global food supply chains, according to Bank of America.
TL;DR
- El Niño poses growing risks to global food supply chains, amplified by elevated fertilizer prices and supply-chain disruptions.
- New Zealand's significant dependence on agricultural exports could benefit from global food supply issues.
- A sustained global food supply problem may result in a positive terms-of-trade shock for New Zealand.
- Bank of America anticipates an upside risk for the New Zealand dollar due to a potentially more favorable terms-of-trade outlook.