Economy

Hello and welcome to the working week.Overnight results from Brazil will play a leading role in news coverage as the vote brings months of bitter campaigning to an end. Deforestation in the Amazon will be an especially pertinent topic with COP27 kicking off in Egypt at the close of this week. With veteran Luiz Inácio Lula da Silva falling two points shy of the 50 per cent required to be elected outright in early October, Sunday’s vote will reflect how entrenched “Bolsonarismo” is in the rural areas at the centre of a booming yet ecologically disastrous commodities trade. Brazil’s interior has undergone significant clearances by agribusiness for cattle, soy and maize during incumbent Jair Bolsonaro’s first term in office. This has reversed a decline in deforestation rates between 2003 and 2015. Opposition to state intervention fomented support for Bolsonaro this election campaign, though he nevertheless sought to secure the backing of poorer voters with a 50 per cent increase in social welfare payments. Stakes are high for indigenous communities who have suffered reprisals at the hands of illegal loggers, while being overlooked by legislators seeking to permit the mining of raw materials in reserves without their consent.On Tuesday, Benjamin Netanyahu will be eager to mount a coup in Israel’s fifth election in less than four years. Leading a rightwing bloc, he is seeking to overcome a small deficit in polling to take a majority in the Knesset and return as the nation’s prime minister. In the US, looming midterms mean presidents past and present are being rolled out to campaign in support of candidates. The final 72 hours of the campaign will see president Joe Biden and former presidents Barack Obama and Donald Trump appear in Pennsylvania, while the latter will also hold a rally in Florida to close the weekend. CompaniesBrazilian gas company Petrobras is due to publish its Q3 results on Thursday. The company suffered from multibillion-dollar corruption when the left were last in office in Brazil. Bolsonaro previously spoke of privatising Petrobras, though Lula’s manifesto called for its return as an “integrated energy company” with his party ambitious for it to play a leading role in the nation’s clean energy transition. Stocks in the company slid last week after polling indicated Lula would rout Bolsonaro in Sunday’s run-off vote. It was among several who lost out on the release of polling, though it also reported that oil production for the third quarter fell 6.8 per cent compared with the same period last year. Economic dataOn Wednesday, the US Federal Reserve will announce its decision on interest rates. Policymakers fear strong wage growth has maintained high inflation, though officials suggested the central bank should begin to prepare for a slowdown in rate rises. Data published by the US Bureau of Labor Statistics and the nation’s commerce department on Friday showed pay for civilian workers during the third quarter increased by 1.2 per cent, while personal consumption rose 0.5 per cent.The Bank of England is expected to raise rates by 75 basis points on Thursday to 3 per cent. Rates have severely hampered homeowners, with spillover into the rental market. In a survey published on Friday, the UK’s Office for National Statistics found half of British respondents with a mortgage said they were worried about a change in interest rates. Two in three people were also spending less on non-essentials and reducing use of gas and electricity. Monday’s planned fiscal statement in the UK has been replaced with an autumn statement to be delivered by chancellor Jeremy Hunt on November 17. Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayUAE, IMF news conference post-publication of outlook report for Middle East and north Africa Norway, results of treasury bill auction Q3: Banco Comercial Português, ON Semiconductor, Japan TobaccoTuesdaySwitzerland, consumer index Japan, BoJ monetary policy meeting minutesUS and Russia, S&P Manufacturing PMIEurope, Q3 gross domestic product Q3: Saudi Aramco, Alibaba, AMD, Amtek, Airbnb, BP, Coca-Cola, Electronic Arts, Mondelez, Nippon Steel, Pfizer, Sony, Thomson Reuters, Toyota, Uber WednesdayGermany, October unemployment rate New Zealand, reserve bank financial stability reportUS, Federal Reserve interest rate decisionWorld, JPMorgan Global Manufacturing PMIQ3: Cognizant, CVS Health Corp, eBay, Estee Lauder, Fastly, Ferrari, MetLife, Next, Qualcomm, Roku, Zillow ThursdayCanada, September trade figures UK, Bank of England interest rate decision Europe, September unemployment rateAGM: DarktraceQ3: Adecco, BNP Paribas, BT Group, ConocoPhillips, Enel, ING, Kellogg, Moderna, Motorola Solutions, News Corp, Orsted, PayPal, Petrobras, Solvay, Stellantis, VerbundFridayEurope, S&P Composite PMIUS and Canada, October unemployment rateQ3: Duke Energy Corp, Itochu, SoftBank, Telefónica, Qantas SaturdayQ3: Berkshire HathawayWorld eventsFinally, here is a rundown of other events and milestones this week. MondayChina, space agency launches last of three modules that comprise the Tiangong Space Station South Korea, five-day military drills with USUS, Supreme Court hears from “anti-affirmative action activists” seeking to bar Howard University and the University of North Carolina from considering race in undergraduate admissions TuesdayGermany, chancellor Olaf Scholz visits chemical producer BASF’s site in Schwarzheide before holding so-called “chancellor talks” in Gifhorn Denmark, voters head to the polls in general election WednesdayIreland, the ECB’s François Villeroy de Galhau to speak in Dublin ThursdayChina, German chancellor Olaf Scholz on the first of a two-day tripGermany, G7 foreign ministers meet for two-days in Münster Belgium, European Commission president Ursula von der Leyen meets new Italian prime minister Giorgia MeloniLatvia, ECB president Christine Lagarde speaks at a conference in Riga UAE, Opec members and oil executives attend the Adipec conference FridayBahrain, Pope Francis visits the predominantly Muslim country to participate in the nation’s Forum for Dialogue SaturdayMalaysia, politicians commence 14-days of campaigning ahead of election More

The threat of a trade war between the EU and the US over the Biden administration’s $370bn climate legislation has stepped up, as France estimated it would lose €8bn as businesses were given incentives to shift to the US.Brussels is demanding that products made in the EU bloc should have access to the same subsidies as the US is offering to a range of industries to spur green technologies and tackle carbon emissions under its Inflation Reduction Act.The IRA measures include tax rebates for buyers of US-made electric cars, as well as a series of other significant industry credits for domestic clean energy initiatives, such as solar, wind, nuclear and carbon capture technologies. Paris has claimed it would lose €8bn in investment as operations are relocated to the US to take advantage of subsidies for local production, diplomats say.While most EU member states are still calculating the potential damage, the bloc countries agreed on the need for Brussels to push for “tangible and concrete” measures, at a meeting of ambassadors last week, they added.French president Emmanuel Macron and German chancellor Olaf Scholz at a meeting on Friday reportedly also found agreement about a European response to the US action that encourages its citizens to “Buy American”The trade tensions have developed despite the Biden administration’s attempts to improve its relationship with Europe after four years of rancour under former president Donald Trump. France, in particular, has been sounding the alarm in recent weeks that the IRA is unfairly protectionist. French buyers of electric cars are eligible for a subsidy of up to €7,000 regardless of where the car is manufactured. In the US, an income-tested rebate of up to $7,500 will apply to new cars made locally.Two big European carmakers, Stellantis, which has a sizeable US business selling Chrysler and Fiat models, and the smaller Renault, have invested heavily in electric vehicle manufacture ahead of a 2035 deadline for the EU to phase out cars with traditional fuel engines, with many of their production facilities located in Europe.Another example of investment that could be affected is in wind energy, GE last year expanded its renewable energy business in Europe with wind turbine blade production at a factory in Cherbourg, France.France has urged the European Commission to respond to the IRA and was working on options itself, said a finance ministry source. Potential responses include filing a complaint to the World Trade Organization, retaliatory tariffs, or for an exemption to allow products made in the EU to be part of the US rebate scheme.An exemption would allow European companies to keep their operations in the bloc, preventing a loss of revenues and green jobs, said a person with direct knowledge of the discussions. “We want Washington to apply the rules in a generous way. This is our best case scenario.”But US trade experts are divided on what steps the Biden administration can take to address the concerns of Europe, as well as Japan and South Korea, about the impact on their industries, without returning to Congress to alter the text of the legislation.The US Treasury’s consultation with industry on how to implement the law could provide loopholes for trading partners. For example, the definition of “final assembly” could mean cars could be imported to be completed in the US and thereby qualify for tax breaks.US Treasury secretary Janet Yellen told the FT earlier this month that her officials were meeting with “different parties” as they worked to draft the regulations that would specify how companies qualified for tax credits.The US and EU last week agreed to set up a working group on IRA, which the White House said would in part discuss “opportunities and concerns for EU producers”.Macron argued during a primetime television interview last week that Europe was naive in sticking with its free trade policies.

“We need a ‘Buy European Act’ like the Americans, we need to reserve [state subsidies] for our European manufacturers,” he said. “You have China that is protecting its industry, the US that is protecting its industry, and Europe that is an open house.”But German finance minister Christian Lindner told the FT that Europe’s response to the IRA should not be to create its own subsidy regime. He called for further talks between the EU and US to discuss its effects, however.“It’s without question a challenge for us,” he said. “But we need to strengthen our own competitiveness in response. We won’t prevent European companies disinvesting and moving to the US with harsh words, and by entering into a competition for subsidies, but by creating really excellent conditions for investment in Europe.”Reporting by Javier Espinoza and Andy Bounds in Brussels, Guy Chazan in Berlin, Leila Abboud in Paris and Aime Williams in Washington More

The pandemic led to border closures, confronting governments reliant on tourism with economic crisis. It also brought a shift in how aid was delivered, with more loans than grants made, and more direct funding to held deliver critical services.The Lowy Institute’s annual Pacific Aid Map showed Chinese aid to the region dropped to $187 million in 2020, its lowest since the institute began tracking aid flows in 2008.Australia and New Zealand provided a third of all aid in 2020.The map tracks development assistance to the Pacific islands, an effort the Institute says increases transparency of money flows, as China and the United States and its allies vie for influence in the strategically important region.A move by the Solomon Islands to sign a security pact with China in 2022 has alarmed Washington and its allies, including Australia.Since 2008, Australia has provided 40% of all aid to the region, followed by New Zealand, with 8.6%, Japan, with 8.5% and China, with 8.5%, the report said. Chinese aid, predominantly loans for infrastructure, had peaked in 2016.The project director of the Pacific Aid Map, Alexandre Dayant, said development assistance remained a diplomatic tool for Beijing, with regional aid focusing on Kiribati and Solomon Islands, which switched diplomatic ties from Taiwan to Beijing a year earlier.Dayant said the overall drop in Chinese aid in the region comes amid negative publicity about the cost of Chinese infrastructure loans, and Pacific island nations having more choice.Australia, which has committed A$600 million in infrastructure loans since 2019, is becoming a prominent Pacific lender and needed to take “considerable care” it did not contribute to the region’s debt problems, the report said.Australia last week said it would spend another A$900 million ($576.99 million) in Pacific aid.The United States has also pledged $800 million more after hosting a dozen Pacific islands leaders at a White House summit in September.($1 = 1.5598 Australian dollars) More

BRASILIA (Reuters) -A polarized Brazilian electorate began casting votes on Sunday in a knife-edge presidential runoff that pits far-right incumbent President Jair Bolsonaro against leftist former leader Luiz Inacio Lula da Silva.Bolsonaro has vowed to consolidate a sharp rightward turn in Brazilian politics after a presidency that witnessed one of the world’s deadliest COVID-19 epidemics and widespread deforestation in the Amazon (NASDAQ:AMZN) basin.Lula promises more social and environmental responsibility, evoking the rising prosperity of his 2003-2010 presidency, before corruption scandals tarnished his Workers Party.Some 120 million voters are expected to punch their choices into electronic voting machines that Bolsonaro has criticized without proof as fraud-prone, raising concern he may not concede defeat, following the example of his ideological ally, former U.S. President Donald Trump.That has added to tensions in Brazil’s most polarizing election since its return democracy in 1985 after a military dictatorship that Lula, a former union leader, rallied against and Bolsonaro, a former army captain, invokes with nostalgia.Brazil’s sharp partisan division has split its population in two. With Bolsonaro stickers on her chest, Rio de Janeiro resident Ana Maria Vieira said she was certain to vote for the president, and would never countenance picking Lula.”I saw what Lula and his criminal gang did to this country,” she said, as she arrived to vote in Rio’s Copacabana neighborhood, adding that she thought Bolsonaro’s handling of the economy had been “fantastic.” At the same polling station, Antonia Cordeiro, 49, said she had just voted for Lula. She said Bolsonaro had only worried about the concerns of the rich, at least until the final days of the campaign when he rolled out poverty-busting measures to win votes. “We can’t continue with Bolsonaro, she said. “He hasn’t worked.”RACE TIGHTENSSeveral polls showed the race between them tightening in the final week, with Bolsonaro eroding a slight lead for Lula. Others show a small but steady advantage for Lula.Bolsonaro outperformed opinion polls in the first round of voting on Oct. 2 among a field of 11 candidates. Pollsters said they recalibrated their methods based on that result, but most analysts still say Sunday’s runoff could go either way.Bolsonaro voted early on Sunday at a military base in Rio. “Our expectation is victory, for the good of Brazil,” he told journalists after voting. Lula voted at a school in São Bernardo do Campo, in Sao Paulo, where he arrived with his running mate Geraldo Alckmin, and several other members of his team.A victory for Lula would mark a stunning comeback for the leftist leader, who was jailed in 2018 for 19 months on bribery convictions that the Supreme Court overturned last year, clearing the way for him to seek a third presidential term.Lula has vowed a return to state-driven economic growth and social policies that helped lift millions out of poverty during a commodity boom when he first governed Brazil. He also vows to combat destruction of the Amazon rainforest, now at a 15-year high, and make Brazil a leader in global climate talks.A second term for Bolsonaro would keep Brazil on a path of free-market reforms and looser environmental protections, while cementing a coalition of right-wing parties and powerful farm interests, which bankrolled his campaign.POST-ELECTION CONCERNSBrazil’s electoral authorities are preparing for a narrow result, which Bolsonaro may contest if he loses.The president has spent more than a year questioning the reliability of Brazil’s electronic voting system. Although there has been no evidence of fraud since it was implemented in 1996, many of Bolsonaro’s supporters now doubt the credibility of the country’s elections. A rising tide of political violence this year, punctuated in recent weeks by armed confrontations involving high-profile Bolsonaro allies, has added to fears that contested election result could trigger unrest.The Superior Electoral Court (TSE), led by justices from the Supreme Court, has devised a security plan to protect its staff and buildings in the event of demonstrations like the January 2021 assault on the U.S. Capitol. Bolsonaro’s allies are organizing a “Victory Party” on Brasilia’s central esplanade on Sunday during the vote count.The president has also asked supporters to stick around voting stations until they close at 5 p.m. (2000 GMT) on Sunday, which critics say could intimidate voters and lead to clashes.Lula, who was born into poverty and led union strikes against Brazil’s military government before founding the Workers Party in the 1980s, has called on voters to defend Brazil’s democracy from Bolsonaro’s “neofascism.” Adding to the climate of uncertainty, Bolsonaro has pushed the military to publicly endorse his theory that the voting system is vulnerable to fraud.The armed forces checked some voting machines during the first-round vote to be sure paper receipts lined up with the results transmitted digitally, but they did not report their findings.Retired army generals have told Reuters they trust the armed forces would not back any unconstitutional moves by Bolsonaro. More

OTTAWA/WINNIPEG, Manitoba (Reuters) – At a warehouse on an industrial stretch in Ottawa, giant metal crates of donated groceries are piled high as volunteers sort canned goods, pasta and other foods to be distributed to pantries around the Canadian city. Demand has surged 33% at the Ottawa Food Bank from pre-COVID-19 pandemic levels, with visits up as spiraling grocery, gas and rent prices, along with fast-rising borrowing costs, leave more Canadians struggling to make ends meet.”We are absolutely seeing more people,” said Rachael Wilson, chief executive of the Ottawa Food Bank, adding the organization is now spending C$6 million ($4.4 million) a year on food, up from C$2 million pre-pandemic.”That’s because the cost of food has risen … but also because of the number of people that are turning to a food bank right now,” said Wilson. “It is unfortunately a perfect storm.”Canada’s headline inflation rate has eased to 6.9% from a peak of 8.1%, but food costs are still accelerating and underlying price pressures remain sticky. At the same time, the Bank of Canada (BoC) has hiked interest rates by 350-basis points in just seven months, one of its sharpest tightening campaigns ever, to try to force inflation back to its 2% target.The result is Canadian consumers and small businesses are being squeezed from both sides, prompting politicians, unions and even some economists to implore the central bank to slow its pace of tightening.The bank this week signaled its tightening campaign was nearing its peak, but made clear it was not done yet, as it hiked rates by 50-bps to a fresh 14-year high.In a television interview after the decision, BoC Governor Tiff Macklem said restoring price stability was not easy, but rampant inflation would be worse.”I understand a lot of Canadians are in debt and interest rate increases will put more stress on them. It is something that we are watching closely,” he told Radio-Canada.’EVERYONE’S NERVOUS’ Canada, with its pricey homes and top of the G7 household debt levels, is particularly sensitive to higher interest rates, with fears mounting the BoC’s aggressive hikes will trigger a recession.Wes Farnell, who runs Eight Ounce Coffee in Calgary with his wife Jen, said their specialty coffee equipment business was growing by 25% to 35% a year before the pandemic, and then boomed as lockdowns led to surging demand for high-end lifestyle appliances. Now he is already seeing signs that hot inflation and recession worries have consumers focused on essentials rather than luxury appliances, which is adding up to fewer large orders even as the holiday shopping season approaches.”Our wholesalers are definitely more tentative about spending money,” said Farnell. “Everyone’s nervous … Will people be spending money? Will there be any money to spend? Will inflation go up even further?”The pain is also being felt on the farm, where record high debt levels and surging operating costs are weighing on many farmers, despite strong grain prices.For Brodie Haugan, who farms with his parents near Orion, Alberta, inflation has hit especially hard, coupled with a relentless drought.With the price of feed rising faster than cattle prices, Haugan reduced his 400-cow herd by 30% in spring. He also delayed buying a much-needed new truck, as the cost shot up to C$100,000 from C$75,000 pre-pandemic. “Right across the board, everything has increased in price, making it very difficult to really do anything at all,” Haugan said.($1 = 1.3516 Canadian dollars) More

Thousands of German industrial workers walked out for several hours over the weekend in an escalating pay dispute as leaders of Germany’s powerful IG Metall union warned of more strikes to come if employers failed to improve their offer. Europe’s largest industrial union is demanding an 8 per cent wage increase for 3.9mn employees in Germany’s automotive, metal and electrical industries to compensate for surging inflation. The pay demand is the highest since 2008. The sector is the backbone of Germany’s wider economy and a bellwether for wage agreements in other sectors. Employer representatives have offered a one-off payment of €3,000 spread over 30 months, arguing that companies themselves were being squeezed by surging energy costs and a potential recession.On Saturday night, employees of more than a dozen companies across Germany, including steelmaker ThyssenKrupp and automotive suppliers Bosch and ZF, began a rolling programme of what the union called temporary warning strikes. The stoppages each lasted for several hours and are set to continue into early November at different companies across Germany. The impact on production was limited, but the stoppages were an important symbol of workers’ determination, a union official said. “The employers’ refusal to enter proper wage negotiations triggered this escalation,” the union said in a statement over the weekend, adding that it would step up its walkouts over the coming days.IG Metall leader Jörg Hofmann has previously warned the union would escalate strikes if employers failed to table a better offer by November 9, when talks are set to resume. Wages in the eurozone have this year lagged well behind inflation, which is expected to have risen above 10 per cent for the first time in the history of the region when October price data is announced on Monday. This has left many workers considerably worse-off in real terms.Peer-Michael Dick, chief executive of Baden-Württemberg’s metal employers’ association, described the warning strikes as “completely unnecessary” and warned they created an additional burden for companies that were already stretched.Economists say persistent high inflation could increase the likelihood of a 1970s-style wage-price spiral and prompt the European Central Bank to raise interest rates to curb inflation.

“Against the backdrop of high inflation, which results in considerable losses in purchasing power, the trade unions are likely to push through higher wages,” said Marco Wagner, a senior economist at German lender Commerzbank.Eurozone wages rose 4 per cent in the second quarter, slower than in the US or UK. But unemployment in the 19-country bloc has fallen to a low of 6.6 per cent and labour shortages are growing in some countries, such as Germany, the Netherlands and Poland, according to Eurostat data from August, the most recent figures available. This puts many workers in a stronger negotiating position.Some employers have given workers lump sum payments rather than lifting annual pay. The German government has encouraged this by treating lump sum payments as tax free. Workers in the German chemicals industry were this month given annual lump sum payments of €1,500 each over the next two years on top of a 3.25 per cent pay rise.The ECB is keeping a close eye on eurozone wage growth after forecasting last month that it would increase from 4 per cent this year to 4.8 per cent next year. ECB president Christine Lagarde told a press conference last week that this was likely to accelerate faster, saying: “Incoming wage data and recent wage agreements indicate that the growth of wages may be picking up.” More

The central bank for the 19 countries that share the euro raised the interest rate it pays on bank deposits by 75 basis points last week, taking it 1.5%, its highest level since 2009.”We will take a significant interest step again in December,” Knot said in an interview with Dutch TV programme Buitenhof, adding that is was likely that the next raise would be between 50 and 75 basis points.”We are not in even half-time yet,” Knot said of the ECB’s fight against surging euro zone inflation.”We are still returning interest rates towards their neutral level, for which we will also need the December meeting.”The ECB will keep tightening its monetary policy next year, Knot said, in an attempt to bring down inflation currently running at close to 10% in the single currency area.”From 2023 we will play the second half, with smaller interest rate steps and by shrinking our balance sheet,” the Dutch central bank president said.”Then we will be in the zone where we will effectively cool down the economy, which is necessary to bring inflation down from 10% to 2% in the next 18 to 24 months.” More

The US and EU have criticised Russia’s decision to pull the plug on a major wartime deal that has unblocked the passage of Ukrainian grain via the Black Sea, with Washington calling it a “purely outrageous” action that risked increasing starvation.Moscow on Saturday suspended its participation in the UN-backed deal with Kyiv, linking its decision to an attack earlier that day on ships in the port of Sevastopol in the Crimean peninsula, which Russia annexed from Ukraine in 2014. Ukraine called this a “false pretext”. “The United States regrets Russia’s suspension of its participation in the operations of the UN-brokered Black Sea Grain Initiative. We urge all parties to keep this essential, life-saving Initiative functioning,” US secretary of state Antony Blinken said in a statement. The deal, he said, had already allowed 9mn metric tons of food products to be exported. It had also succeeded in bringing down global food prices that were sent soaring by Russia’s invasion of Ukraine. Josep Borrell, the EU’s foreign affair chief, called on Russia to reverse its decision, saying it “puts at risks the main export route of much needed grain and fertilisers to address the global food crisis caused by its war against Ukraine”. “By suspending its participation in the grain deal on a false pretext of explosions 220km away from the grain corridor, Russia blocks 2mn tons of grain on 176 vessels already at sea — enough to feed over 7mn people,” Ukraine’s foreign minister Dmytro Kuleba wrote on Twitter.Moscow on Sunday defended its actions, with the Russian ambassador to the US arguing that the “truly outrageous” move was Washington’s failure to criticise the attack on Sevastopol, which he described as “reckless”. The attack, which appears to have targeted Russian warships, comes eight months into Russia’s full-blown invasion of Ukraine.The Black Sea grain deal, hashed out this summer in Istanbul, had seen Moscow guarantee safe passage for cargo ships carrying grain coming from a string of ports in the south of Ukraine that had previously been blocked by the war. On Sunday, specialist outlet Agricensus Fastmarkets reported that there was now “panic” in these Ukrainian ports as international vessels already docked and loading there feared they could get trapped now that Moscow had suspended the safe passage corridor. Ukraine’s president called for a “strong international response” from the UN and G20. “Russia is doing everything to ensure that millions of Africans, millions of residents of the Middle East and South Asia find themselves in conditions of artificial famine or at least a severe price crisis,” Volodymyr Zelenskyy said in an overnight video address. “Why can a handful of people somewhere in the Kremlin decide whether people in Egypt or Bangladesh will have food on their tables?” he said. Russia denies that its attack on Ukraine, major global exporter of grain and other food products, caused price rises or exacerbated food shortages. It has been hinting at its desire to pull out of the deal for some time. Russia’s President Vladimir Putin has in recent weeks expressed dissatisfaction with the deal, claiming it was not sending grain to “the poorest countries”.The UN, however, has not billed the agreement as intended to send grain directly to poorer countries, saying instead that it was supposed to make grain purchases more accessible to all by lowering market prices. Moreover, the increasing voicing of disapproval has coincided with major military defeats for Russia, and its suspension of the deal comes as a counteroffensive by Kyiv in the southern Kherson region is picking up pace. “Why is Moscow disrupting the grain deal now? The answer is: Putin needs leverage as things go south for him on the battlefields in Ukraine, so the threat of global food crisis needs to be put back in the Russian toolbox of coercion and blackmail,” wrote Alexander Gabuev, senior fellow at the Carnegie Endowment for International Peace. “However, this audacious attempt to gain leverage may backfire against Moscow,” he added. “The killing of the grain deal will create rifts between Russia and powerful players like Turkey and Saudi Arabia.”It was countries in the Middle East that pushed Moscow to open up Ukrainian food exports, fearing food crises and possible political upheavals at home. More