Canada, Russia, US, Australia look to record grain harvest mean “disinflation” in EM. US growers in 11 states are forecasting record wheat harvests this year and the USDA is predicting one of the best-ever seasons for corn and soybean crops. The Financial Times is arguing that this will be fundamentally disinflationary for emerging markets, saying declining food prices could join lower import costs (thanks to broadly strengthening EM currencies — Egypt aside, taban) and lower oil prices in driving prices down. It could mean a lower import bill for Egypt — and inflows into global emerging markets. Writes one analyst: “The idea of a disinflationary shock in EMs could add another round to that yield hunt. If you expect inflation to fall then the ex-ante real interest rate just went up. It could be another factor that pushes people to EMs.”