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    Russian-Ukraine war impact: What all will get costlier in India?

    Russian-Ukraine war impact: What all will get costlier in India?

    Russian-Ukraine war impact: What all will get costlier in India?
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    By CNBCTV18.com  IST (Updated)

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    Caught in the crossfire: From basic food staples to crude oil to cars, EV batteries and petrochemicals, prices of just about everything will shoot up as Vladimir Putin pulverises Ukraine.

    Russia’s invasion of Ukraine is now in its third week. While the graph of lives lost in the conflict rises relentlessly, the menace of higher prices of staple food items adds to the all-round dread. Russia and Ukraine are two of the biggest exporters of raw material. But now Ukraine’s exports have been halted while Russia has become the most sanctioned nation in the world. All the price spikes are expected to further contribute to the racing inflation that central banks are now hoping to target.

    Here are some of the items that are feeling the heat of Russia's war:
    Wheat

    Russia and Ukraine together contribute around 29 percent towards the global wheat export market. Ukraine is known as the ‘breadbasket of Europe,’ but the conflict has caused fears of a global supply shortage. Prices of wheat have risen multi-fold and as the war progresses, with reports of Russia destroying Ukrainian farming machinery and fields, the supply of wheat from the country may take years to recover.

    Corn 

    Ukraine is also one of the biggest importers of corn globally, sending out tonnes of the golden cereal to countries in Africa as well as to China. But with ports, land routes and air freight not moving from Ukraine currently, all shipments have been halted. This has resulted in a dramatic increase in price and threatened the food security of millions.

    Other grains

    Russia and Ukraine contribute to a significant percentage of barley and rye production, which is then exported to nations across the Middle East, North Africa and to China. These grains have also seen an increase in prices due to the ongoing conflict, with further hikes expected, as the war continues.

    Metals 

    Russia is a hub of rare metal exports like nickel, platinum, palladium, gold and more. Sanctions on Russia have now prevented these metals from reaching the global market. The price of nickel recently exploded to $100,000 a tonne on the London Metal Exchange as fears of shortages ran rampant.

    Steel/iron 

    Russia and Ukraine have several large iron mines that deliver the necessary raw material for the production of steel in the region. With the ongoing conflict, prices of steel are expected to sharply rise as the world had still been only slowly catching up to the pent-up steel demand from the pandemic.

    Edible oils

    Russia and Ukraine are also some of the leading exporters of edible oils, especially sunflower oil. India, in particular, imported a total of 18.93 lakh tonnes of sunflower oil of which 13.97 lakh tonnes was sourced from Ukraine while an additional 2.22 lakh tonnes was sourced from Russia. Prices of food oils are now expected to rise and consequently affect other FMCG goods as well.

    Crude oil

    While crude oil prices have fallen from their five-day hike, they are still hovering around the $100-mark, high enough to cause energy prices to remain elevated. It will lead to a rise in prices of all petroleum and petrochemical products.

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