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Ukrainian invasion adds to chaos to global supply chains

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Ukrainian invasion adds to chaos to global supply chains

And if the conflict goes on longer, it could threaten the summer wheat crop, which flows into bread, pasta and packaged food for large numbers of people, especially in Europe, North Africa and Central America. in the past. Food prices have already skyrocketed due to disruptions in global supply chains, increasing the risk of social unrest in poor countries.

On Tuesday, global shipping giant Maersk announced it would temporarily suspend all shipments to and from Russia by sea, air and rail, with the exception of food and medicine. Ocean Network Express, Hapag-Lloyd and MSC, the world’s other major ocean carriers, have announced similar suspensions.

“War makes the worldwide situation for commodities more dire,” said Christopher F. Graham, a partner at White & Williams.

Jennifer McCain, head of the global economics service at Capital Economics, said the global economy appears relatively untouched by the conflict. But it said a shortage of materials such as palladium and xenon used in semiconductor and auto production could add to existing difficulties for those industries. Semiconductor shortages have halted production at car plants and other facilities, raising prices and impacting sales.

“It could add to the shortages we are already seeing, exacerbate those shortfalls, and ultimately further damage global growth,” she said.

International companies are trying to comply with broad financial sanctions and export controls imposed by Europe, the United States and several other countries that have curtailed the flow of goods and money into and out of Russia.

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Within days, Western governments moved to exclude some Russian banks from using the SWIFT messaging system, limiting the Russian central bank’s ability to boost the ruble, cutting off shipments of high-tech goods and Freeze the global wealth of Russian oligarchs.

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