Commodities and Politics: Is 2021 bringing more disruption than 2020?

A talk by Andrew Busch, Kona Haque, Swithun Still and Eddie Tofpik ED&F Man, Rolweg S.A. & ADM Investor Services International Ltd covering topics like:

• Trade wars: A status report
• The first effects of the Biden presidency on trading
• Export limitations in Russia: How are we coping?

TRANSCRIPT:

Eddie: Hello, everybody. Welcome to this discussion on “Is 2021 bringing more disruption than 2020.” Before we start, I'd like to remind you one more time, as Ben has, that we have a Q&A session at the end of this but please put your questions, post them up in the question and answer section of this Zoom and we will deal with them in due course. As we start now, I'd like to introduce the panelists and I'm going to start with Kona. Could you kindly introduce yourself and tell us about yourself?

Kona: Hi, thank you very much, Eddie. So I'm Kona Haque. I head up research for ED&F Man, a 240-almost-year-old company, one of the oldest British companies ever. So, the company trades softs globally and, I have been doing commodities for about 25 years now, metals, energy but most recently ags and softs. So, I'm an economist by profession, and it's a delight to be here. Thank you very much.

Eddie: Great Kona. Now, Andrew Bush, could you kindly introduce yourself, please?

Andrew: Sure. I'm Andy Bush, I'm the former chief market intelligence officer for the US government at the CFTC Commodity Futures Trading Commission. My job there, from 2017 to 2019, was to inform the public and Congress, and the White House on what was going on in the economy, the big events that were playing out, and the big themes and drivers of what was impacting the economy and of course, the markets. I write research at andrewbush.com and I'm a keynote speaker and I'm just excited to be on this panel. So thanks for the invite, Eddie.

Eddie: Brilliant, great to see you. Swithun, can you introduce yourself, please?

Swithun: Hey Eddie. Thanks for the invitation as well. I am also sometimes a keynote speaker and I am now the CEO of Rolweg, which is a Swiss domiciled trading company affiliated to Ulusoy Un, which is a Turkish miller. I was previously very much engaged and active in the Russian grain market. Previously, my last incarnation was as director of Solaris Commodities and prior to that, another couple of other trading companies. And I'm excited to be on the panel. I'm not an economist. I'm a linguist originally by training. But I've morphed into a trader, which would shock and appall my grandmother, who wanted me to be a diplomat. But, as I speak Russian, everyone thinks I'm a spy, so pseudo-diplomat. But I can neither confirm nor deny.

 Eddie: Thank you very much indeed. Now, last but not least, I'll introduce myself. My name is Eddie Tofpik. I'm head of technical analysis for Archer Daniels Midland Ιnvestor Services branch called ADM Investor Services International Limited. I'm also director of the Society of technical analysts, the oldest and one of the largest technical analyst societies in the world. And also, Swithun, you'll be pleased to know, I am not an economist as well. Moving on from that, sorry Andy, we're gonna now be talking seriously about this subject, about 2021 and the disruption that's is bigger or less than 2020. What I'd like to start to talk about specifically is trade wars, or the lack of them, or the ones that are brewing specifically. I'd like to speak to you Kona at the moment, to see what your thoughts are about the US and UK relationship. Now, following the Brexit situation, what are your thoughts on that?

Kona: So we started the New Year, essentially.Εnd of December was when the UK outside of the EU was going to be formed and how has it gone? We had four years in the making, and that will be two years on which was the transition, and now that we actually cut the umbilical cord if you like, how has it panned out? Well, it's bad, to be honest. Trade with the EU has plummeted. Now, we don't know yet whether it has to do with COVID or whether it's just to do with the fact that we've had some friction and these are just temporary hiccups, but the facts of the matter are, the UK's largest trading partner, we've seen trade plummet and we don't know yet whether that's going to rebound. It's important because at the moment trade across the world is being impacted. Logistics, rates are going up, there are issues on the supply side. But, if the UK is unable to trade with the EU, it needs to find alternative outlets and that is still very slow in the making. Previous to Biden, the Trump administration had provided lots of hopes for trade partnership with the UK, that has not yet materialized. So the UK has to do a big job in terms of ratcheting up its trade partners if it's to fill a void with the EU. We'll see, it's still to be panned out. But at the moment, the first month of data for January and potentially even for February has not been very promising. We don't know if it's a hiccup yet, although this is a longer-term trend.

Eddie: Thank you very much indeed. Good points on that. Andy, you're going to be looking from the other point of view. What do you see from the US's point of view towards the UK? And I suppose also towards the EU given past recent trade disputes? What are your thoughts there?

Andrew: Well, I don't want to sound like a typical boorish American, but the UK is like a small component of what is on the US plate right now. I think everybody saw what happened up in Alaska between the US and China. And I don't want to jump ahead if you're going to ask about that. That was a train wreck. But it really is emblematic of what is happening with the Biden administration, when it comes to trade, they're not going to significantly change their approach to China. That is really clear. So it's going to be similar to what Trump had, kind of combative to say the least and the tariffs are not going to come down anytime soon. As a matter of fact, it'll probably be more difficult, unless both sides can agree on something to do maybe with climate change, which John Kerry and the envoy from China are going to meet on climate change, I think this week, as well. So maybe there's some movement forward there. But that was a bad meeting in the sense of hope for change there. When it comes to the EU, there's already significant change between the United States and the EU, they both back down on their tariffs between Boeing and Airbus, which's a great step forward. And I also think you're going to get a movement on a tech company, global tax, or a digital tax structure that the EU and the OECD have been working on and the United States under the Biden administration will pick up and probably run with. So where the UK falls in that it's obviously important. The UK is an important trade partner with the United States. But these are some other things that are gonna make the Biden administration somewhat drag their feet on, like moving forward on a free trade policy between the US and the UK. So your third line, I would say in the UK, as far as the US's focus right now, that could change but I think that's the way I see it.

Eddie: Brilliant, thank you so much. I especially like that part about the tech tax coming through, because that's one of the things that's been mentioned many times, especially after what Australia did, regarding some of the financial news that comes out there or general news that comes out there. Swithun, you're sitting outside the EU, but in the European zone, doing a lot of business around the world. What are your thoughts on that? Primarily, let's say the EU, but also the US and the UK and their relationship and this house is going well or souring?

 Swithun: Well, I see that there are some similarities between Switzerland and the UK now that the UK has come out of the European Union. The Swiss are a very pragmatic bunch and they have maintained a bilateral relationship with the European Union. So they've had the benefits of membership without some of the costs. There are costs, but they're not as significant as being a member. There have been certain points of friction with the European Union, as you may well be aware, about the free movement of people. There was a vote here in Switzerland. Direct democracy is a very big thing. They have a lot of referendums. The Europeans didn't like the result of the UK Brexit referendum. And they didn't like the result of the Swiss referendum that made a lot of pressure on the Swiss, kind of we're the big brother and bashing them with a little bit of a metaphorical stick. But thus far, Switzerland has actually done very well. I mean, it punches above its weight. For a very small country. It's got a very attractive climate for investment. Business is still attracted to coming and creating businesses here. You only have to look at the statistics, which I can't share with you. It's off of my fingers, but the amount of oil or any other commodities that are traded through Switzerland, via trading companies domiciled in Switzerland, notably in Geneva for the oil business, obviously, the metals and some of the fertilizers often out of Zug. And then, I mean all along the lakefront, essentially, from Lausanne to Geneva, you've got grain trading companies, sugar trading companies, cocoa trading companies, coffee trading companies. So, I was very hopeful that Brexit could be a similar kind of situation for the UK, being outside the European Union, and yet somehow, still very closely tied through the relationship that we've had with European countries over many years, but remains to be seen whether the Europeans want to punish the UK for daring to vote the wrong way.

Eddie: I take your point on that. Now, let's look specifically at commodity prices and commodities generally. What's generally driving them at the moment you think, and you can pick and choose your commodities where you want to see which things are as an example, but Kona, looking at the commodities you cover, what's actually driving the market at the moment.

Kona: I'm happy to talk about my specific commodity which is the softs. But I also think it's important to look at what's the impact. It's a subset of what's happening across the macro commodities. So what's happening in 2021, we're seeing inflation pressure, the markets went into this year with a bearish view on the US dollar. Then there was this view that post-pandemic, you're going to see a huge 1920 style roaring recovery and demand. So all of this pertains to a very structurally bullish environment for commodities. When you have inflation, clearly the best way to hedge against is investing in commodities. So we have seen the commodities index, the Reuters Commodity Index up by 50% from a year ago, and this year alone, it's up maybe 15%. It's come off a little bit this week, but it has been pretty brutal on crude oil. And I think Softs have sort of jumped on the bandwagon, there have been some supply-side issues we've come off from a La Niña weather phenomenon that impacted Thai sugarcane yields. And I know that's also impacted weather in South America, and the US Midwest for grains. So there have definitely been supply-side issues on the agricultural side. But I would argue that right now, what we're seeing is some kind of macro-led interest in commodities, which you didn't really see a year ago. Commodities as a whole bottomed out about a year ago. And it's just been pretty much steadily rising from here. Now whether we go to supercycle from here, I know we're going to be discussing that next tomorrow, there'll be some interesting things on my mind on that, whether that's actually going to happen or not.

Eddie: Great. Thank you very much for that. Andy, you're not so much involved in commodities, but more in, I remember from foreign exchange days and in fixed income, but what sort of view would you think is actually pushing commodity prices from your point of view, specifically, when you were in the recent past in the CFTC? But also now in your thoughts? 

Andrew: Clearly, there are two big drivers. One is the rapidity of the rebound in China, obviously, the way that they handled the COVID outbreak and how fast they got back to growing again and opening up their factories, which has been a big driver for pulling in commodities and growth. But the big story globally is the United States. This is, and I want to emphasize this because of the amount of money that the US government along with the Federal Reserve has pumped in as far as stimulus goes, I don't think a whole lot of people understand how much money has gone into this. It's $12 trillion. Now, let that sink in for a minute $12 trillion. That's more than 50% of the GDP for one year in the United States. So when you begin to look at how commodities rise so fast and why lumber was going up so quickly and a whole host of commodities that rebounded from the lows in March, this has been the biggest driver I believe of what's happened. Not all the money has been allocated yet. I mean, even from last year, we still have about $4 trillion that has not moved into the economy fully. And we have another 1.9 trillion that was just approved. So we're really talking about such a significant amount of money flowing through the US economy that's going to drive growth. For the first quarter, it'll be north of 5% for the entire year. I think the OECD is looking at six and a half percent of GDP. Eddie, I've been in the business a long time, I can't even remember the last time the US had six and a half percent GDP. But it's significant growth. And again, you see this, with the Fed keeping interest rates near zero and telling everybody, they're gonna continue to do it, you see this in housing prices, they're just exploding. There's not enough housing in the United States to fulfill that demand. And so builders are going nuts, contractors are going crazy. And you're seeing new homes starting to be created. But the demand for money is pushing up interest rates. So we'll see how that plays out with commodities. So overall, to me, that's the story as we head into 2021 is that, just a massive amount of wall of money and the momentum in the US economy that's driving demand for commodities.

Eddie: I get your point on that entirely. Specifically, when you said about lumber, and I'm thinking about some of the other commodities out there in the world. It's just there have been rapid rises that we've not seen for a long time in commodities that haven't necessarily been very busy in the past. Swithun, your thoughts? I know you look towards the east more, towards Russia and towards China to a certain degree as well, and Eastern Europe and down towards Turkey, etc. What are your thoughts on that specifically with the grain markets as well? What are your thoughts about things that are actually moving in those markets? What's driving them?

Swithun: Simple answer, what's driving the market? Its demand. So you have to look at supply, you have to look at demand. And whilst the supply is on many commodities, including wheat, expected to be maybe slightly up, depending on whose figures you're looking at, the IGC I think said the wheat will be around 777 this coming season, which is slightly up but then demand is up too. So we're looking at demand, mostly from China. That's really a big driver because it's the biggest consumer of beans in the world. And that trade agreement with Trump, which is carrying on to Biden, I mean, the US is pumping corn into China, like there's no tomorrow. I mean, the hog herd is needing to be rebuilt, they had massive issues with African swine flu. The hog herd is being rebuilt, they need protein, they need feed compounds, and they get that from soybean, soybean meal, and corn. So that, for me, is one of the biggest demand drivers in the grain markets today. It's China. So, who will feed China, as Lester Brown famously said, it's going to be whoever is cheapest. But the supply dislocations are another thing that needs to be looked at, because of politics, and whether the two known unknowns in the grain market, you get the brightest negations because of imposition of export tariffs or import tariffs. And the big one, for example, Australia is suffering massively at the moment because China just said that they're not going to be taking in Australian barley. And China was by far the largest importer of Australian bodies. And now they've got some issues about, let's not talk about politics too much, but they align themselves a bit too much with Trump and the trade war. And they're paying the price. And Canada is also paying the price for doing what they did with arresting someone who was close to the Huawei Chairman I believe. And they're not buying Canadian grains or rapeseed, for example.

Eddie: I think it was the Chief Treasury Officer at Huawei or something like that?

Swithun: I believe so.

Eddie: I think the other thing also, if you need to speak to Australians about barley, then you should assume they've had issues with iron, ore, and coal, which have been massively pulled back on.

Swithun: I was focusing really on the grain. If you want to talk about other things, wine, they whacked I think 200% import duty on Australian wine. It's our gain because now we're buying cheap Australian wine in Europe and Switzerland.

Eddie: Andy, can I just ask you now. You also mentioned the tax on tech. Can you expand a little bit on that? What do you think is going to be in sort of big broad brushstrokes in terms of that when it comes about? And it's obviously an OECD thing. So it's going to be something we're all going to be dealing with.

Andrew: You really have to keep an eye on this. It's a digital tax. This, as everybody knows, these companies have grown so important in the global economy but they just have not paid a commensurate tax, at least that's what authorities believe, and so all of these countries when they're stimulating their deficit spending, for the most part, they're going to need to find a way to raise some revenues and really it's also a way when you're looking at Amazon and you can have your opinions on Amazon and what they do and who they are but essentially if they are a business that has the advantage over a local business that people are going to them and not paying the local tax, the retail tax, then that's a huge advantage I mean why would you not go to Amazon to buy products if it's 5-10 percent cheaper and the vat taxes in Europe are a great example of that. So in the United States, each state has an individual retail sales tax, some of them are significantly higher like in the city of Chicago, which is one of the highest taxes out there, so again you would use Amazon. The bottom line is this. These companies have had a bull's eye on their back for some time and now with the Biden administration, you're likely to get them to move forward on it. They are going to take the lead I think from Europe because Europe has moved faster on this and everyone's trying to figure out how to do this because of course, it's like when you're getting into taxes, you really get into a situation where it's a beggar thy neighbor, so if France puts a digital tax side but Germany doesn't, well then everybody goes to Germany and it's the same way across the world so that's the struggle with it and you really need to have everybody come together to agree on a structure of the tax to make it happen. Will it hurt these companies? Certainly. They'll have to pay more, their profits will be less because of that, but there are all sorts of other additional things that are coming as the United states start to focus on antitrust issues. The movement by apple recently to cut the fees that they charge on apps, google did it too, it is an indication that these companies are waking up and saying “maybe we can make things a little bit better without having the Sherman antitrust tags thrown on us and broken up” and that's where I think it's gonna be fascinating to see over the next two to three years on this.

Eddie: That spectrum of antitrust and break up I think is over everybody still, because, I think it was only 100 years ago, 120 years ago, that we saw Theodore Roosevelt break up the oil companies, I think it was occasional or one of those ones.

Swithun: Standard Oil.

Eddie: There you go. Swithun, actually for you, the situation in Russia specifically with grains and the taxation there on exports and I don't know if you want to pick up on some maybe taxation possibilities mirroring what happened in Argentina if you like, how they did it and how it didn't work there and what Russia is trying to achieve as well, what are your thoughts about that.

 Swithun: This is a public forum so I need to bite my tongue a little bit and because I'm clearly speaking with my capacity as CEO of this company, so let's say I'm speaking in a personal capacity, firstly and secondly, in a nutshell, it didn't work out too well for Argentina frankly and I would hope that Russia would take the lessons of the history of Argentina and not repeat the same mistakes because generally speaking if you tax exports, you're effectively taking money out of the pockets of the producers and you're disincentivizing them from growing what they normally grow. so in the case of Russia, it has become a massive success story frankly in the grain market I mean, today, Russia is the number one wheat exporter in the world and it's gone from huge net importer during the so-called great train robbery and in the last 20 years it's just been exponential growth and if anything, the sanctions that were applied on Russia in 2014 helped the Russian grain market develop and because they had a devalued currency and they had to internally invest in their various industries including agriculture. now, frankly, it seems to me, my personal opinion, they seem to be shooting themselves in the foot by introducing these firstly massive export taxes, we're talking at the moment, it's 50 euros per tonne on wheat, 25 euros per tonne on corn, 10 euros on barley, but that's nothing in comparison with what they're going to be doing, starting in the new crop. This is from the second of June. they've got this very convoluted reporting mechanism, which they're now still working out the mechanism. But essentially, it will mean a floating tax with a set level of $200 minimum. So, the wheat prices today, the new crop is more or less $245, you will charge 70% tax, so that's like a $30 tax. But it could be much more, it's a floating tax. it could be depending on how high the wheat price goes. So you've got a massive disincentive for producers to plant wheat. So of course, a lot of them were thinking “Okay, we'll plant oil seeds and something else.” Bad luck guys. They have introduced an export tax on sun seeds, rapeseed. They're getting taxed across the board. So it's essentially stealing money from the pocket of the farmer, giving a massive disincentive for them to be producing what they're producing. And the success story looks to be going towards an export-led mark with a form of kind of semi collectivization punishing the kulaks like they had in the 1920s. Bad commercial farmers making money, “how dare you, we will have some of that money and you will plant what we tell you to plant”. It's a little bit crazy for me.

Eddie: I appreciate your sensitive situation you're in and I appreciate your candidness there as well very much. We have some questions from our audience. Ali Mohammed asking “is commodity rally demand-driven? Or more liquidity-driven? Given the consumption patterns, etc.” Kona, what do you think of that? Is it more liquidity-driven? Or is it because there is actual fresh demand or is it a combination of the two of them?

Kona: I think for this current specific rally, it's a combination. The fact that expectations of a massive economic V-shaped even recovery is all about pent-up demand, spending as a proportion of GDP in countries like the USA and the UK is up to 6-7%. So when all of that is then unleashed to when leisure and industry and travel and hospitality reopened and when you add that on top of the government fiscal stimulus, that's a huge amount of demand that's going to be unleashed and commodities will be beneficiary. But add to that is the liquidity aspect, the fact that money is so cheap today, interest rates are historically very low, and we talked about all the fiscal, the trillions of dollars that are coming through. And monetary policy and quantitative easing have continued. That's providing so much demand for new yield or a search for alternative yield and commodities, along with Bitcoin and other weird and wonderful asset classes are all making quite a comeback. There's a combination.

Eddie: Andy, what do you think? Is it being pulled? Or is it being pushed?

Andrew: Well, I think there are some structural problems, depending on which commodity you're talking about. When you have COVID hit, and you shut down the global economy, it's not easy to restart these things, first of all, and then second of all, as demand has grown, it's not like you can flip a switch and a steel factory comes on. So it depends on the commodity. It's hard to produce more trees quickly, as well. So there's definitely that supply component to bring whatever commodity back on as the demand rises, but as Kona said when you have really cheap interest rates and cost money is really cheap, people borrow and then want to buy. So we are seeing a pickup of inflation, obviously, for many of these things. So it's a little bit of the combination of the new world and the old world when it comes to supply, the old economy didn't really keep up in the sense of being able to produce at very high levels, maybe they shut down their factories, lost their workers over the last year, and then the new economy demand doesn't sync up well with the old economy. Cobalt, lithium, all of those products, especially, there's such a focus on climate change and ESG with batteries and things like that. Even chips, just as an example. You can't keep up with the demand. So I think Kona's point was spot on.

 Eddie: Swithun, your markets are being pulled or being pushed?

Swithun: That's a very tricky question to answer. To be honest, it's both. I'll give you a bland reply on that. It's like a tug of wars, pull and push. There's no cure for high prices. You get high prices, you plant more. You plant more, you get more production, you get lower prices. There's no cure for low prices. I can talk in these pithy aphorisms all day if you like. We've got 10 minutes. I'd love to but I've said enough. push, pull, supply-demand.

Andrew: Can I just add one thing in here, too? Like a doomsday guy. But obviously, this has been building for some time. Climate change is moving forward in the sense that governments are realizing it, it is a problem. But I will tell you this. Last summer, last year was fascinating for the United States as far as California, and obviously, the forest fires in Australia as well. So both of those places were on fire. But here's what I would say. You really want to keep an eye out for the risk that comes to commodities from a very large climate event. We haven't really had one that's been significant, like a drought recently, and I'm not advocating for that. I don't want that. But that's always in the back of my mind, we're at higher risk for a climate-like event impact on commodities than I think we've ever been because of where we're at with climate change. So that should always be in the back of everyone's minds.

Eddie: It's a very valid point.

Swithun: It should be at the front of some traders' minds, actually. I can only comment on that from personal experience. 2010 was obviously a big drought in Russia. And they banned grain exports, and then the wheat price went from wherever it was up $50 within a day, after that announcement. And obviously, traders love volatility, they like that sort of volatility. Well, as long as they are on the right side of the volatility. They don't like it if they are on the wrong side. That's painful. But you need to be very aware of the two known unknowns, politics and weather. Weather is a big one, because, Andy, right on the nail, it's very volatile. It's not global warming so much as global weirding. it's weird weather, we're having extreme weather.

Kona: And just to mention on the politics side of things, this pandemic has hit the emerging markets hard. They will recover worse, less well, if you'd like. If there were to be a food crisis event, food is always very emotional and we've seen the Arab Spring arise from it. So were you to see this kind of issue and emerging market currencies are beginning to weaken. What does that mean in terms of limited access to dollars to pay for these grains or essential food commodities? If that leads to food protectionism, that's going to be a problem.

Eddie: That's the phrase I wouldn't like to hear, food protectionism, in these current circumstances. Now, there's a question I have had here about inflation. Now we talked a little bit about inflation. We talked a little bit about interest rates. We have a sufficient supply at the moment in the world. Do we see the money that's going to come in the wall of money, the whole thing that's coming together to us? Do we see that as potentially chasing up commodity prices? Some you can actually anticipate because there'll be greater demand for as you say, lithium because people will be able to actually drive more and they'll be buying electric cars. But, the basic foodstuffs, also they'll be pushed? Or are there any specific ones that you'd like to look at? Kona what would you think about that? What would you think would be the effect of inflation? If it comes about and will it come about from when we come out of this COVID situation?

 Kona: Let's assume we do get inflation. If we do, then the investors will always look to commodities as an asset class to hedge against them. It's time and time-proven to be very good protection. But will we get inflation in the first place? And I think that's debatable. The Feds made it very clear they're targeting 2%, they said there might be a little bit of overshoot, I do believe we'll get short-term output price pressure, but the Fed has so much ammunition in terms of tweaking that tapering, rising interest rates. They will act whenever they need to reduce it. A little bit of overshoot is something they would welcome. It's a sign that the economy is moving in the right direction. So we shouldn't be afraid of it. But I'm not convinced we're going to get anything like the 80s or 70s style inflation. We haven't got that wage spiral price mechanism that we had back then. We still have globalization and tech that are reducing labor costs. And I think that means you won't get full-fledged economic inflation. So my answer is a) I don't think we have got runaway inflation ahead of us, and b) if we do, commodities are a good place to hedge.

Eddie: Thank you. Andy, what are your thoughts on that?

 Andrew: As far as inflation goes, I just saw a study that came out and said you have to run inflation at two and a half percent for about 36 months before it really becomes a problem. And we've been undershooting inflation targets globally for some time now. So I worried that the Fed is too sanguine about it a bit because I see it in the housing prices, I see it in a lot of the commodity prices that we're seeing the surge and I know a lot of money flowing in. So we'll see inflation continue to go up from this point. And I guarantee you, once the US economy really feels like it's reopening in the sense of people feel comfortable with face to face meetings and traveling and going to destinations and having business conferences, then you're going to see a surge in demand for a lot of different products that will drive it. One of the things that I see right now that's really interesting is the rise in Bitcoin. That is emblematic, I think of the speculation that's going on around the world. And the way I look at Bitcoin is yes, it has practical purposes. But I compare it more to art, who's to say what the value of art is? It has value, it could be a store of wealth, for sure. It's not quite a medium of exchange as far as Bitcoin goes, it's too slow. But I think it's emblematic of how much trading is going on, how much speculation is going on. And then you can toss in GameStop, as well. But that's what I see. As money flows freely and as stimulus checks get paid out, It drives demand for a lot of interesting things. And I wouldn't call it necessarily a bubble, but things that are expanding, trading-wise, that you really got to keep an eye on and watch very carefully.

Eddie: Right, thank you very much. Swithun, any thoughts on inflation at all, from your part of the world?

Swithun: I think Kona said it, but commodities are a great hedge for inflation. So I think that that's one of the reasons why we might be seeing a super cycle in commodities. And you'll be talking about that more tomorrow. So, what's for farmers holding on to their crops as a hedge for inflation. 

Eddie: Much as they did in Argentina when they started putting taxation on it.

Swithun: QED and the storage are cheap and plentiful. So I think that a lot of people got squeezed last summer. when they were short, the market, the farmer just sat on his crop, didn't sell. Prices went from $180 to $300, on wheat. so rinse and repeat. If you don't learn from history, you'll repeat it.

Eddie: I think it was Mark Twain who said history doesn't repeat itself. It just rhymes. We're gonna be coming up to our end now. So thank you very much to all our audience for listening. I'm going to ask our panelists now. In a phrase of 10 words or less, I'll say that, is 2021 bringing some disruption to 2020? What are your thoughts after all you've heard so far today? Kona how would you answer that question?

Kona: Ten words. Commodities, inflation, hedge, supercycle, V or U-shaped recovery. Watch out for the US dollar.

Swithun: That's more than 10 words Kona.

Kona: No, that was literally 10. I was counting.  

Eddie: I'm moderating this. Kona thank you very much. You're very kind. Swithun, you will have your say in a moment. Andy, what are your thoughts in 10 words or less?

Andrew: Can 2021 be more disruptive than 2020. Kind of hard to beat it. But there is an upside for more craziness.

Eddie: We love the craziness. Swithun, what are your thoughts on this?

Swithun: Well, I can't do it in 10 words, but I'll try and do it in 10 sentences. So firstly, we don't have an unhinged guy tweeting at midnight. So that is one thing, that we will have less disruption of immoderate tweets sent, that people will be shocked and appalled and buying or selling whatever commodity he's either endorsing or slagging off. So I think that we'll see less disruption from that perspective politically, but I think it's a few trade wars that will carry on. There'll be a geopolitical power play between the US and China that will be ongoing. You've got the disruption of the EU in the UK. So I think we'll have less disruption, but not much less.

Eddie: Less disruption but not much less. I'll take those as being the 10 words.

Andrew: You could have just said that Swithun.

Eddie: I think it's fair enough. He's got a great, big, lovely tractor behind him. Of course, he can say whatever he wants. Combine harvester, I correct myself. Lady and gentlemen, thank you very much. It's been an absolute pleasure and honor to be here and thank you very much for the very decisive and interesting points that have been raised.