GEOLOGICAL SOCIETY
At the time of writing this article, the Russian-Ukrainian conflict is entering its seventh week.
It is a major humanitarian crisis, with over 40,000 Ukrainian deaths thus far, and the invasion triggering Europe's largest refugee crisis since World War II.
More than 4.7 million Ukrainians have left the country and a quarter of the population have been displaced.
The conflict is also having far reaching global economic consequences across many sectors, as both Ukraine and Russia are globally significant producers of several commodities.
We will review some of these sectors in relation to the Trinidad and Tobago economy.
Agricultural sector
Ukraine is a world leader in terms of agricultural exports. It produces 18 per cent of the world’s sunflower seed, safflower or cottonseed oil exports; 13 per cent of corn production; 12 per cent of global barley exports; and eight per cent of wheat and meslin.
It is such an important contributor to food security across Europe that it is commonly called its “bread basket”.
The only European country to rival Ukraine in the production of crops like wheat, corn and sunflower is Russia. As such the ongoing invasion of Ukraine poses a serious threat to the vital supply of stable foods which much of the world relies on.
The shortages created by the sudden and significant removal of these agricultural products from the supply chain have led and will continue to lead to inflationary pressures on the prices of these products. As countries scramble to restore their food security with an already limited supply of global agricultural products, supplies will be routed to the countries willing and able to pay premium prices.
We here in Trinidad and Tobago will undoubtedly feel the effects of these shortages and price increases as we visit the grocery stores and food establishments. Flour products and cooking oil are an integral basic input of our culinary offerings, so with any prolonged conflict we can expect limited supplies on our grocery shelves and paying more at food stalls and restaurants for our beloved food items.
Energy sector
In addition to being both Russia and Ukraine being major agricultural commodities producers, Russia and to a lesser extent Ukraine are both significant oil and gas producers.
Russia is the third-largest oil producer after the United States (US) and Saudi Arabia at 10 million barrels a day, but it is the world’s largest exporter of oil and petroleum products, according to data from the International Energy Agency (IEA).Russia is the world’s second-largest producer of natural gas, behind the US, and has the world’s largest gas reserves. Russia is the world’s largest gas exporter. In 2021 the country produced 762 bcm of natural gas, and exported approximately 210 bcm via pipeline.
[caption id="attachment_960066" align="alignnone" width="1024"] Farmer Serhiy, a grain producer, shows a crater left by a Russian shell on his field in the village of Ptyche in eastern Donetsk region, Ukraine. - AP Photo[/caption]
Europ
