Eating Lab Grown Meat, El Nino And Trading Against Markets – Fx Ideas

I was wondering why 78% of polled Americans would not eat lab-grown meat when I remembered the “pink slime” scandal from 2 years ago. https://tradehaven.net/market/credit-default-sickness/

Yet at the same time we have China admitting that 20% of their farmland is contaminated which errr, was a no brainer to me when the melamine scandal broke out in 2008 if we all bothered to think a little deeper beyond the news headlines. http://online.wsj.com/news/articles/SB10001424052702304626304579507040557046288?utm_medium=referral&utm_source=t.co&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304626304579507040557046288.html%3Futm_medium%3Dreferral%26utm_source%3Dt.co

The milk had to be destroyed somewhere and they were pouring it into the waterways and waterways water the land !

CHINA POLLUTIONAnother no brainer which I have been thinking about for the past 2 years was the fracking business and sudden emergence of a lot more sink holes etc. If we sat down and thought about it, fracking is messing up the Earth’s crust is it not ?

And so, now we have confirmation that fracking does lead to earthquakes. http://www.huffingtonpost.ca/2014/04/11/fracking-linked-to-earthquakes-ohio_n_5133838.html?&ir=Business&ncid=tweetlnkushpmg00000018

Well, lab grown meat will have to come out in a big way soon just in case no one is noticing the rocketing commodity prices yet.

Yes, I say yet because consumer prices are just starting to adjust in the first waves of the tsunami.

* Beef prices are the highest since 1987
* Pork prices are at their highest ever as viruses continue to kill pigs in America (hopefully not that same virus as the Chinese floating pigs last year)
* Shrimp prices have hit a 14 year high (Whitley Road Big Prawn Mee price has gone up 25% to $12.5)
http://www.zerohedge.com/news/2014-04-15/soaring-food-inflation-full-frontal-beef-and-shrimp-prices-explode?utm_source=twitter&utm_medium=social&utm_content=4843311

Bananas (http://www.mirror.co.uk/news/weird-news/fears-worldwide-banana-shortage-killer-3418075), coffee (http://www.news.com.au/finance/business/brazil-drought-sends-coffee-prices-to-highest-point-in-two-years/story-fnkgdftz-1226856738201), limes (http://time.com/66053/america-lime-industry-shortage/) and cocoa (http://www.bloomberg.com/news/2014-01-28/cocoa-surges-to-28-month-high-as-chocolate-eaters-drive-shortage.html) are in trouble too and soy beans (http://in.reuters.com/article/2014/04/17/markets-grains-idINL3N0N905420140417) are at a 8 month high.

And the best part is that El Nino has not hit the headlines yet, albeit several warning articles since last year.

You see, El Nino takes time to form. It starts very, very deep down in the Ocean where a minute change in temperate takes time to rise to the surface. A small fraction of a degree over a large tract of the Pacific, errr, will lead to a serious deviation in surface temperatures and this one is threatening to be a stunner ! and even hotter than the last serious El Nino of 1997-1998. http://www.slate.com/blogs/future_tense/2014/04/07/el_nino_2014_2015_forecasts_show_it_could_grow_into_a_monster.html

Forward commodity curves are already starting to price El Nino effects, on top of the viruses and bugs and drought we are experiencing now. But no one really knows how bad it will be.

I escaped the last El Nino (1997-1998) while working in London but my dad remembers it well over here in Singapore. He still rants about it today except I do not have the heart to tell him an even more severe No. 2 is coming… soon. (Better buy a spare air con and air purifiers besides stocking up on the rice)

Now that I am reading that Li Ka Shing, along with other billionaires, is also putting his money into egg substitutes. http://www.forbes.com/sites/ryanmac/2014/02/17/egg-replacing-startup-hampton-creek-foods-raises-23-million-from-asias-richest-man-and-yahoo-cofounder-jerry-yang/

Lab grown meats, here I come.

A Hungry Man Is An Angry Man

As a matter of circumspection, we cannot be prepared for El Nino other than the extra bag of rice or canned peach that we buy or the spare air conditioner. Or like me, trying to produce more oxygen than I consume, in my grand gardening ambitions.

But we do know it will be harsh on Asia and everywhere between the Pacific and the Americas, including southern Africa.

Drought in India, Indonesia, Africa and Australia as opposed to floods in California and a mild winter for the US (which is good for shopping).  http://www.wired.com/2014/04/el-nino-effects/

That leaves us mainly with only good old Europe for food and I am unpleasantly surprised to find out that Ukraine is the largest exporter of Corn in Europe, exporting about 40% of US total exports.

For Asia, El Nino could be another nail in the coffin for the developing countries that are highly exposed to food price inflation, like India et al. That could throw a spanner into the works for an emergent recovery although rate hikes could be short lived if the weather stabilises (which would take a year).

And if we think ahead, its about time we looked at selling the currencies again – the El Ninos vs the EUR and good old USD.

I even like the EURAUD at its pretty support level.

EURAUD

Whilst it is not fair to compare to the 1997-1998  period of the last El Nino because it was ill timed with the Asian Crisis, there is a contrarian opportunity to go long.

EURMYR is also sitting at a support point that could inflex higher.

EURMYR

Yes. I know it is pretty lame-brained of me to think of trading on a weather anomaly when everyone else is watching for the next Draghi speech.

You see, humans are creatures of habit – keep them fed and they will behave how you want them to and dutifully read the newspapers that they are supposed to read. When you turn up the heat and take their food, it can become a lovely mess.

Mark my words, El Nino articles/propaganda about to hit the headlines, and I suspect, food safety standards may slacken into food shortages (better not go to JB for tze char) and air con prices are about to go higher.

PS : This article is dedicated to the old uncle I met in NTUC who chided me for buying 3 lemons for $2.45 because he says lemons have always been 20 cts and its like buying gold (his words).