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November 24, 2025 • 12 mins

Part one - Rabobank’s Singapore-based global strategist discusses a world economy totally dominated by geopolitics. Could there be a silver lining for NZ farmers if Trump sells out Ukraine? And does he think the AI bubble will burst?
Part two - Rabobank’s Singapore-based global strategist diverts his focus to the NZ economy as we discuss this week’s OCR announcement, Trump’s tariffs, the commodity outlook and why food production is still a good business to be in.

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Episode Transcript

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Speaker 1 (00:00):
I've always love chatting to this man on the country,

(00:02):
even if I don't always like the message. His name
is Michael Every, Rabobanks, Singapore based global strategist. Last week,
Rabobank came out with its agri Commodity outlook for twenty
twenty six. The headline more than just supply and demand
factors shaping global agriculture and twenty twenty six with geopolitics

(00:24):
set to play a crucial role, China be the USA.
Michael Every surprise surprise.

Speaker 2 (00:32):
Yes, absolutely well.

Speaker 3 (00:33):
I'd like to think I probably had a little bit
of input into that, and by the way, it was
completely correct because just after it came out, we have
had the surprising news that we have a potential Ukraine
peace deal on the table. Even though the form of
it is very contentious and the final form of it

(00:54):
is unclear, it does appear as if something along those
lines is going to transpire, and potentially as soon as Thursday.

Speaker 1 (01:02):
But as Trump selling Ukraine out.

Speaker 2 (01:06):
That's a really loaded question.

Speaker 3 (01:10):
Because he certainly isn't prepared to keep backing Ukraine the
way it's being backed so far. That's abundantly clear. He
is forcing a settlement. If we see the terms finally
being what we've seen floated so far, which is to
say that will withhold military aid, will withhold intel, and

(01:33):
of course we will hold funding. If you're not going
to sign up for this, that is, you know, basically
saying sign here, thank you very much. But at the
same time, if America is not in a position to
continue doing more than that in the longer run, and
Europe is unable to stand up and fill the gap,
what other option was there on the table? So I'm
not trying to take a strong editorial stance one way

(01:55):
or the other. It's undeniable the case that America is
forcing Ukraine to sign, if that is the final version
of the deal. It does also, however, guarantee Ukraine's sovereignty,
It does have a defense guarantee, and it does have
an economic guarantee in it to try and incentivize everybody
to benefit from peace rather than war. So it's not
completely one sided, but it is very much not what

(02:17):
Ukraine wanted.

Speaker 1 (02:18):
Rabobank's Aggrey commodity outlook that I've referenced for twenty twenty six,
one of the interesting numbers I looked at was GDP
growth on a global stage two point nine percent this year,
easing to two point seven percent and twenty twenty six.
What happened to the world economy is coming right.

Speaker 2 (02:37):
Well.

Speaker 3 (02:38):
I don't want to say anything negative about anyone who
put in the hard work to produce those numbers, but
I don't think they really tell much of a story.
The GDP in itself as a concept at a national
level is something I don't take very seriously, but I
want to be abundantly clear there. It was set up

(02:59):
by the America in World War Two to try and
measure military output, and somehow we've expanded it to explain
anything and everything going on around us, and I think
it knows the price of everything and the value of nothing.
That's GDP for any national country. And then you've got
the questions of, you know, the quality of the data,
which is getting worse and worse as everything changes structurally.
So the world economy then incorporates loads of economies who

(03:19):
just produce really dodgy numbers, you know, because you're doing Tom,
Dick and Harry rather than just just the West. And
I really really would not be trading that as a number,
not just from Rabbi, but I mean from anyone at all,
you know, as a real directionality, I'm sure anyone who's
out there on the farm has got a far better

(03:40):
idea of what actual supply and demand looks like than
someone sitting behind a spreadsheets. So let me try to
say that to you know, to put a positive spin
on it.

Speaker 1 (03:48):
What do you think the world commodity outlook will be
for twenty twenty six from a New Zealand point of view?
And am I going to focus more in on New
Zealand on the sick and part of this interview, But
do you see commodity prices across the globe holding up?

Speaker 3 (04:03):
Well, it really depends on the cheaptical outlook off That's
what we said in the Heltlook that we published. Because
for example, if we get this Russia deal, if Russia
is reincorporated into the global economy, all sanctions are dropped.
You know, you have a very different backdrop to the
one that would have been presumed a week ago where
that wasn't the case. You know, there are winners and

(04:23):
losers within that, and it's too complex to unpack here
now I'm afraid on the call exactly who wins and
who loses. But one really easy point that you can
make is that it's definitely going to start to affect
things like diesel prices, which is good to farmers because
obviously diesel's used on the farm. If Russia and Ukraine
are no longer blowing up each other's refineries and energy supplies,

(04:45):
and if Russia sanctions are lifted on Russian diesel, that's
going to get that much cheaper everywhere, which is a
real boost and again goes to show how the numbers
that predict confidently what will happen next year can change,
you know, with one political decision. So remains to be seen.
But commodities are crucially regardless of that particular backdrop of
that story, very very much in the eye of the storm.

(05:07):
I mean, these aren't ones that New Zealand specializes in,
for example, the rare earth that we read about all
the time. But commodities run through the overall geopolitical architecture
like your you know the name of the holiday resort
you go to through a stick of rock, thinking about
you know what seaside towns in the UK used to
be like. So that story isn't going to go away.

Speaker 1 (05:27):
Just a final comment from you, Michael Ivery on the
equity markets. Do you buy into this AI bubble burst?

Speaker 3 (05:37):
Well, I don't talk equity. I want to be abundantly clear.
What I can mention just in terms of the concept
of AI is I don't think people understand the totality
of what we're talking about here, because if AI does
everything that it promises, well, no one's going to have

(05:57):
a job. It's as simple as that were going to
have miraculous breakthroughs in areas that we've never had them
in before, and we're close to that from what I see.
You know, in areas like mathematics and physics, we can
really really push the envelope. But in terms of you know,
your mid level white colored jobs, enormous numbers of them
can be just swallowed up by technology and then a
shorter timeframe than people realize. And if you think people

(06:19):
are young, people are unhappy now because housing so expensive,
or try telling them they'll never get a job on top.
So you know, the implications for that for the economy
are shocking. And I'm not quite sure whether that tells
you stocks should be doing X, Y or Z, but
I don't think it's being factored in. And on the
other hand, if AI is a complete bubble and it
doesn't do anything. And again I'm not taking a view
on that, but as we know, there are strong views

(06:40):
each different way and certainly some of the ais that I.

Speaker 2 (06:42):
Use are bloody useless.

Speaker 3 (06:43):
If that is the case, you know, then that share
price isn't justified. And then yeah, we could potentially be
looking at a huge drop in some stocks and what
would be less fanding if that were to happen. So
I look at it in a very very different way.
It will be transformative whatever happens. A question is who
is transformative for and is he transforming on top of you?

Speaker 1 (07:04):
Michael every Rabobanks Singapore based global strategists will take a
break on the other side of it. Let's have a
look at the New Zealand domestic economy. Welcome back to
the country. We're chatting to Michael every Rabobanks Singapore based

(07:27):
global strategists. Right, let's have a look at New Zealand's
domestic economy. Now, I don't know how micro you go
on this, Michael, but we've got an OCR announcement this week.
In fact, tomorrow our time, we're talking about another twenty
five point basis STROP and our official cash rate and
that's it. What do you reckon? What's Rabobank saying, is

(07:48):
this the bottom of the cycle.

Speaker 3 (07:51):
Well, it's a pause him to always keep in touch
with what our fantastic analyst, Ben Picture is saying on
that because the data do change, the bankdrop changes in
his all can change. But he's he's certainly of the
view that we're very close to the bottom of the cycle.

Speaker 1 (08:06):
We talked about Trump when we were talking about the
international economy. In fact, global anything has got Trump's fingerprints
all over it. Here domestically last week we saw him
drop tariffs on beef and kiwi fruit. Is the more
to come?

Speaker 3 (08:24):
Well potentially, Look, I mean again, I can talk at
great length about this. When they brought their tariffs in,
they had one particular vision in mind, and now very
very clearly you are starting to see a pivot in that.
And theoretically you've got different schools of tariff thought. One
of them is you tariff everything coming in to generate revenue,

(08:45):
and the other one is why do you tariff things
that you can't produce yourself, Like if you can't grow
kiwi fruit, you like kiwi fruit, why are you bothering
to put a tariff on it. But you do put
a tariff on something that is produced by another country
that you can make yourself to encourage substitution for yours
rather than theirs. And in Kiwi fruits there you go
and beef. Of course, the Americans can produce their own beef.

(09:08):
They don't have enough of it, so that would also
make sense for them to lower it on others temporarily
at least until they can manage to build up their herd.
And I believe that, plus the election politics are trying
to make sure that inflation goes down ahead of November
twenty twenty six, you know, is a strong argument. I
think we'll get a lot more tweaking going forward. The
one thing I can tell you that won't go away

(09:28):
a taris they'll state. The question is exactly on what
and a what level.

Speaker 1 (09:33):
We talked about international commodity prices and how New Zealand
fits and are with that, and as you said previously,
a lot of this is going to depend on what
happens geo politically, but how well positioned is New Zealand
to battle its way through twenty twenty six because we've
been waiting since COVID Basically, Michael every for our economy

(09:54):
to come right.

Speaker 3 (09:57):
Well, so's everybody to be abundantly clear. There's no one
who's come out of COVID smiling and saying, you know,
these are the best of times. Everyone's at best saying
these are the best of times, these are the worst
of times. And some people are just saying these are
the worst of times. So you're in the same boat
as everyone else, basically, and it's.

Speaker 2 (10:19):
Really really unclear.

Speaker 3 (10:21):
Will not be very very clear on this exactly what
will transpire in twenty twenty six, just because the tectonic
plates are moving. We've already addressed the Ukraine issue, which
is huge Ragri of course, and it's huge for Europe
and it's huge for the world. But we have tensions
in Asia Pacific between Japan and China as we speak,

(10:41):
and I'm sure those are in the local headlines. We
have tensions between India and Pakistan. They haven't gone away.
We still have the Middle East, you know, on a
knife edge. We have bits of Africa where our coed
like they're about to take over control again. We've got
the US using gumboat diplomacy in Latin America and potentially
about to make a move on Venezuela. So we live

(11:02):
in incredibly uncertain times and everything can go perfectly well,
and everything can be sorted out, and things can go
wrong in different regions. And you know, some of them
appear to be moving in the right direction, some of
them appear to be moving in the wrong direction. But
they're all conflated, and they're all related to what America
is doing on tariffs, although it's not. American terrorists cause

(11:22):
these problems, to be abundantly clear, they're both different, you know,
different sides of the same shape.

Speaker 2 (11:28):
Shall we say, I'm.

Speaker 1 (11:28):
Trying to get a good news story out of you
to furnish on, but fundamentally, as food, I what we
do here in New Zoo, I'm still a good business
to be in.

Speaker 2 (11:38):
Well.

Speaker 3 (11:39):
I mean, I'm tempted to say something sarcastic and say
no because nobody needs to eat anymore, because you love
to ask me that question, Jamie, And every time I
do repeat, people eat right. That truism never goes away.
But I don't have a more original way to put
it than that.

Speaker 2 (11:56):
That.

Speaker 3 (11:56):
Yeah, if everyone listening regularly hasn't heard me say it
well and doesn't think it every day of their working
ways when they're getting up and producing the great stuff
that you guys produced, then you know, let me say
it again, people need to eat. But above and beyond that,
as I said, as a near term boost, it looks
like the price of diesel might be coming down if
things go the right way. So there you go, that
would be a little few extra dollars in your pocket.

Speaker 1 (12:17):
Well, mind you you can only eat if you can
afford to eat, and if AI takes job Michael, eating
might not be an option. But anyhow, but on that
positive note about food being a good business to be
in and diesel prices going down, we will love you
and leave you always love chatting with you today on
the show, and this was one of your least alarmist
chats you've ever had with me. I think you're going

(12:39):
soft in your old age.

Speaker 2 (12:41):
I've done something wrong.

Speaker 3 (12:41):
Then if you look at everything is going through the background,
if you use one of these soft ones, yeah, I'm
definitely losing my cutting edge.

Speaker 2 (12:46):
I have to try and be sharper next time I
talk to you. Lovely to chat, Bye bye, Thank you, Bobo.
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