Thought Starters

So ends the Equity Mates 2023 USA tour

Sorry this email is a day late, we’ve been turned around by the time zones in the United States.

After an epic few days in Omaha, Nebraska and a week in New York we’re wrapping up the Equity Mates USA tour. If you want to catch up on what we’ve been up to, head over to our Instagram page.

We were also lucky enough to interview some American investors in person, which we’ll be releasing on Equity Mates Investing Podcast over the coming weeks (Apple | Spotify | Website). Make sure you’re subscribed to check it out!

We’ve learnt so much while we’ve been over here and spoke to some fantastic investors. Yet, as we leave, our overriding thought is how lucky we are to live in Australia. We can’t wait to get home!

Global rice shortage is set to be the biggest in 20 years

Rice production in 2023 will record its largest shortfall in two decades. It feels like we are seeing more and more of these stories these days. Recently we’ve had iceberg lettuce in Australia, cooking oil in the UK, baby formula in the US. All three of these shortages had different causes (weather, war and product safety respectively) but the outcome has been that wherever you are reading this, you’ve likely seen some empty supermarket shelves over the past few years.

Estimates are that the world will be short 8.7 million tonnes of rice in 2023. This shortage has been driven by the ongoing war in Ukraine and challenging weather in China and Pakistan. China, the world’s largest rice producer, has seen heavy rains and floods. Similarly Pakistan, which accounts for 7.6% of the world’s rice, has seen annual production fall by almost one-third due to severe flooding.

Experts expect the major rice importers in Southeast Asia to be most affected by this shortage: Indonesia, the Philippines and Malaysia. They also expect countries that are already feeling food shortages and food price inflation to feel this rice shortage most acutely, chiefly Pakistan, Turkey, and Syria.

But wherever you are in the world, don’t be surprised if one of your food staples gets a bit more expensive.

Overinflated: The journey of a humble tire reveals why prices are still so high

ProPublica have followed the journey of a car tire - from a rubber plantation in Southeast Asia to a repair shop in the United States - to illustrate the ongoing challenges faced by the global economy.

In the United States, tire prices have risen an average of 21.4% over the past two years. That price rise is just for the tire itself, factor in the rising cost of labour to fit the tires, and American motorists are feeling the pinch on this essential, but rarely budgeted for, item.

This article traces the causes of that price rise. Starting in the rubber plantations of Thailand and Malaysia two years earlier, where COVID shutdowns prevented migrant workers reaching the plantations and rubber output fell. By early 2021, rubber futures prices had jumped nearly 50%.

This story then heads north-west, up from Asia and into Eastern Europe, where Russia’s invasion of Ukraine added more cost to this tire supply chain. Synthetic rubber is made from petroleum, and oil prices jumped after Russia’s invasion. On top of that, Russia was the world’s second-largest exporter of carbon black, a powder that is essential to tire production. (One expert in the article explains, “without carbon black, a tire would be like a rubber band”).

From the cost of these raw inputs, to the cost of ocean freight, labour and even changing trade policies and tariffs, there have been so many factors that have led to the increase in the price of tires. A reminder that the inflationary pressures in the economy will take some time to unwind.

Swedish Death Cleaning can improve your life right now

This article doesn’t have much to do with business or investing, but is a fascinating concept and one we wanted to share. Move over Marie Kondo, there is a new hot concept in the cleaning and organisation space: Swedish Death Cleaning.

Based on the Swedish concept of döstädning (literally “death cleaning”), it is focused on making the lives of your loved ones easier after you die by getting rid of unnecessary stuff and organising what is left. At some point in our lives, we should stop accumulating more stuff and start dealing with the stuff we’ve already got. That way we aren’t leaving an enormous, heart-breaking job for our loved ones when we pass on.

This isn’t just about throwing everything out. It is also about organising our lives - both physically and digitally - so it is easy for our loved ones to navigate after we die. The additional benefit: it also makes it a lot easier for us to navigate our own lives while we are still alive.

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