Global Commodity Market Suffers Due to Russia-Ukraine Conflict

Inflation has become a part and parcel of our lives. Every now and then, a major global event takes place, and we find a price hike in every segment. It was not so long back that the entire global market was hit badly due to the coronavirus pandemic. And in the recent turn of events, Russia’s military operations in Ukraine, the international market has received yet another major blow.

The recent military advances of Russia on Ukraine have shaken the global commodity market. It has cast uncertainty on the metal markets, mainly due to disruption oversupply, and availability of raw materials.

What is the global situation and how commodity market is affected?

The US and the EU have made sanctions that prevent the Central Bank of Russia (CBR) from accessing about half the amount that it holds in the foreign-exchange reserves. It is done by blocking the ability of CBR to convert US Dollars and Euros into rubles.

The measure is taken as an action to condemn Russia for its move against Ukraine. Although these sanctions are supposed to have a limited impact on the global market, it is expected that the world economy will face lashes in the form of a major hike in commodities prices.

The rise in commodities prices could be for three major reasons:

  • Supply concerns
  • Destruction of physical infrastructure
  • Sanctions

Does it have a major impact on India?

Yes! Believe it or not, the Russia-Ukraine crisis is not limited to their boundaries. It has a major and severe impact on the global market, including India.

Russia is known for producing around 6% of aluminum in the world and is also responsible for around 7% of nickel mine supplies globally. With the conflict going on, and disruption of supply of these materials the prices of the related industries are on a surge.

It is also due to the tension between the two countries that the price of copper hits the highest at $10,438.50.

Among the many industries, copper is widely used in building wires, communication cables, power cables, and the overall wire & cable industry.

India, being a developing country has a huge requirement for wires and cables due to its extensive growth rate and new constructions. Hence, a rise in the wires and cables also affects the price of a real estate property.

Major leaders of the wire and cable industries in India, such as Paraflex, are playing a key role in delivering high-end products to consumers while trying to contain them from experiencing global inflation. Although nominal, their part cannot be overlooked. Their farsightedness makes them a leading example for global companies.

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