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Ukrainian invasion adds chaos for global supply chains

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And if the conflict drags on, it could threaten the summer wheat harvest, which turns into bread, pasta and packaged food for large numbers of people, especially in Europe, North Africa and the Middle East. Food prices have already soared due to global supply chain disruptions, increasing the risk of social unrest in poorer countries.

On Tuesday, global shipping giant Maersk said it would temporarily suspend all shipments to and from Russia by sea, air and rail, except for food and medicine. Ocean Network Express, Hapag-Lloyd and MSC, the other major global shipping carriers, announced similar suspensions.

“War only makes the world commodity situation worse,” said Christopher F. Graham, partner at White and Williams.

Jennifer McKeown, head of global economics at Capital Economics, said the global economy appeared relatively insulated from the conflict. But she said shortages of materials like palladium and xenon, used in the production of semiconductors and automobiles, could add to those industries’ current difficulties. Semiconductor shortages have halted production at auto factories and other facilities, fueling price increases and weighing on sales.

“It could add to the shortages we are already seeing, exacerbate those shortages and end up doing more damage to global growth,” she said.

International companies are also trying to comply with the extensive financial sanctions and export controls imposed by Europe, the United States and a number of other countries that have clamped down on the flow of goods and money in and out. from Russia.

Within days, Western governments decided to block some Russian banks from using the SWIFT messaging system, limit the Russian central bank’s ability to support the rouble, halt shipments of high-tech goods and to freeze the global assets of Russian oligarchs.