The prospect of rising inflation in commodities is bringing out a very distinct response. Governments are discouraging commodity exports, taxing them, releasing their strategic reserves, and trying desperately to stabilise domestic prices. We see this in metals. And could also see this spread to other commodities, especially in food and animal feed.

What this implies is the lurking fear among governments about the looming threat of inflation. Exports which were once seen as the ticket to economic growth by China and Russia, are now being strongly dissuaded. When this trend is adopted by more nations, markets around the world will become more closed and localised. The disinterest in world trade shown by large producer nations will effectively make things tough for large user nations which chose imports overproduction.

Naturally, global markets in commodities critical to infrastructure development are likely to become more disconnected and disrupted. While producer nations will keep their inflation in check by controlling domestic prices, global inflation may still go unchecked and unattended. The geopolitics of it simply can’t be overlooked. How the USA, a superpower depending on imports, responds to this situation remains to be seen. With its massive infra push announced, it has its hands full implementing its plans without inflation making a deep impact on it.

Clearly, inflation is the new globally exported commodity and the US government must find a way to stop its import into America. India produces what it needs and is well poised to tackle the upcoming scenario. Strangely, it could well take a leaf out of the China playbook.

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