EXPLAINER
Russia is the second largest exporter of wheat at 35 million mt, next only to 37.5 million mt of EU. Ukraine is the fourth largest exporter of wheat.
The impact of the Russia Ukraine war is much beyond just oil and natural gas supply and its costing. The war between two developed nations of Europe is surely going to leave a long lasting impact on the global economy and extending even to the global agri-commodities markets.
The disruptions on travel through the Black Sea and Sea of Azov along with Russian banks being cut off from the international payments system is going to cost dearly to the world. To understand this impact we have to first be aware of all the things that Russia and Ukraine produces or exports to the world.
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Russia is not only the world's third biggest oil producing country, next to the United States and Saudi Arabia but is also the second biggest natural gas producer after the United States. Russia is the third biggest coal exporter, behind Australia and Indonesia.
Russia's war on Ukraine has led to the Brent crude to reach USD 110-15/barrel and international coal prices to unprecedented USD 440/tonne levels.
Russia is the second largest exporter of wheat. In its most recent report on February 9, the US Department of Agriculture estimated Russia's shipments for 2021-22 (July-June) at 35 million tonnes (mt), next only to the 37.5 mt of the whole of European Union.
According to Bloomberg, Egypt and Turkey import over 50% of their wheat from Russia and Ukraine. Ukraine is the fourth largest exporter of wheat with 24 mt just behind Australia with 26 mt.
Read | DNA Explainer: What is Vladimir Putin's 5T war strategy?
Ukraine is the world's third largest exporter of corn/maize, with a projected 33.5 mt in 2021-22, after the US (61.5 mt) and Argentina (42 mt). China is one of the biggest buyers of maize from Ukraine. In 2019, 63% of China's maize demand was met alone by Ukraine. Along with this, the Netherlands also imports more than 50% of its requirement from Ukraine.
India and China are the biggest markets of edible oil in the world. Ukraine and Russia are the top two exporters of sunflower oil, at 6.65 mt and 3.8 mt, respectively in 2021-22, as per US Department of Agriculture. 79% of India's requirement and 63% of China's requirement was met by Ukraine alone in 2019.
With this war the already high prices of oils in India may rise further.
Russia and Belarus are major exporters of fertilisers to the world. Russia and its neighbour Belarus are the world's No 2 and No 3 producers of muriate of potash (MOP) fertiliser, at 13.8 mt and 12.2 mt in 2020, respectively, behind Canada which produces 22 mt of MOP.
According to Bloomberg, China and Brazil imported 30% of their fertiliser from these two countries in 2019. The United States and India too are major buyers of the commodity from Russia.
Russia is one of the biggest suppliers of Palladium, a rare earth metal that is used to manufacture semiconductors. Russia meets 45% of the global palladium supply. The crisis is expected to put additional pressure on the already struggling industry. Semiconductors are necessary for manufacturing electronic devices including mobile phones and laptops.
According to the report, the largest buyer of Russian gold is the United Kingdom. In 2020, it imported gold worth USD 17 billion from Russia.
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