Diminished food supply arising from Russia’s intrusion of Ukraine has possible repercussions beyond empty stomachs, Agco president Eric Hansotia informed CNBC’s Jim Cramer on Thursday.
According to Hansotia, about “13% of the global calories came out of production” when Russian and Ukrainian borders closed down.
“This is a really big deal, because when that volume of calories comes out of the food chain, it triggers other things. Not only hunger, but unrest. The last time we had this kind of disruption, it was one of the major triggers for the Arab Spring,” he stated in an interview on “Mad Money,” describing the pro-democracy demonstrations that occurred in the Middle East and North Africa in the early 2010 s.
The Russia-Ukraine war has actually put pressure on farmers internationally to produce more crop to offset a space in supply left by the 2 nations. As rates of wheat increase, so do rates of fuel and fertilizer that increase expenses for farmers.
Cramer cautioned previously today that wheat and corn futures would continue to increase and prompted financiers to purchase a basket of farming stocks, with Agco making an area on the list.
Hansotia stated that Agco is focusing on assisting farmers increase their crop without tiring their minimal supply or making purchases that might consume into their earnings. He included that the business’s financial investment into innovation companies likeApex AI and Greeneye Technology, along with its acquisition of Appareo Systems has actually assisted in this objective.
As for the farming business’s company operations in Russia and Ukraine, the president stated that the business has actually focused on the security of its staff members and dealerships.
“We moved a lot of them out to the safer part of the country or across the border. Hundreds, in fact, have been part of that process,” he stated, including that the business tracks the staff members and offers funds for them.
Another top priority is “helping the farmers in that area stay productive,” Hansotia stated. Agco has actually likewise assisted supply real estate for displaced Ukrainians and made contributions to help refugees, he included.
Agco stock increased 1.34% on Thursday.
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