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Weather Impacts & Destructs

There have been many reasons that have created volatility in the last two years. For those reasons, the weather has been less talked about. But given the current scenario it might become one of the main reasons for the volatility in the next six to nine months:

Currently, most of Europe and the United Kingdom are witnessing the hottest summers in decades. This has resulted in higher usage of energy as cooling systems are brought down to lower temperatures. This is important as most of these counties are going to face energy supply constraints from October onwards. Thus saving more today for tomorrow is the need of the hour for these countries.

In this heat, even USA is getting impacted as most of the crop-growing states are facing severe drought and high temperatures resulting in lower sowing. This is an addition to the higher fertilizer prices that have already impacted the crop sowing this season.

On the east side of the world, there are severe floods and heat waves that have impacted countries like China and India. Though the impact might be limited to certain regions of these big nations. The disruption by heat and rains within the same period is impacting the crop sowing in these countries.

The next six to nine months are critical as the winter and harvest season approach any extreme weather conditions will impact the yield and energy usage that would bring the next level of inflation.

This can be only lowered in impact if the countries are already facing severe de-growth in terms of demand even causing a depression in some cases.


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