Essay Question:

Please read the following article and describe how a Russian invasion of Ukraine, could impact global supply chains along with prices of goods and services.

https://www.cnbc.com/2022/02/23/impact-of-russia-ukraine-on-supply-chains-food-metals-commodities.html

Here is the artical

A summer wheat harvest in Chernihiv, Ukraine, on Thursday, Aug. 10, 2017.

Vincent Mundy | Bloomberg | Getty Images

Oil andgas prices

U.S. President Joe Biden on Tuesday describedRussia's actions as the beginning "an invasion" of Ukraine.

Wheat and corn prices were already soaring. Wheat futures traded in Chicago have jumped about 12% since the start of this year, while corn futures spiked 14.5% in the same period.

Food inflation has been rising, and could worsen if an armed conflict erupts.

"Rising food priceswould only be exacerbated with additional price shocks, especially if core agricultural areas in Ukraine are seized by Russian loyalists," said Per Hong, senior partner at consulting firm Kearney.

Russia's recent aggression on Ukraine is part of an 8-year war: Research center

He pointed out that Russia is also the world's top wheat exporter. Together with Ukraine,both account for roughly 29% of the global wheat export market.Links to an external site.

Further, any disruptions to the natural gas supply will in turn affect the production of energy-intensive products such as fertilizers and that's bound to hit agriculture further, said Holland.Fertilizers were already in short supply last yearLinks to an external site., leading to soaring prices.

Russia was thelargest supplier of natural gas and oil to the European UnionLinks to an external site.last year.

Metals and raw materials

Ukraine has steadily increased its exports over the years, and is now a "huge provider" of raw materials, chemical products and even machinery like transportation equipment, according to Tiura.

It's also a major supplier of minerals and other commodities, analysts said.

"Ukraine's currency began declining in value since Russian troops started gathering at the border. This will increase the cost of their exports," Tiura added.

South Korean minister discusses supply chain risks amid Russia-Ukraine tensions

Russia also controls about 10% of global copper reserves, and is a major producer of nickel and platinum, according to Hong.

Nickel is a key raw material used in electric vehicle batteries, and copper widely seen as an economic bellwether is extensively used in electronics manufacturing and construction of homes.

"The U.S. chip industry heavily relies on Ukrainian-sourced neon and Russia also exports a number of elements critical to the manufacturing ofsemiconductors,jet engines,automobiles and medicine," Hong said.

Impact on Germany

While most of the European Union would be affected by the escalating crisis, Germany would be especially hard-hit.

Germany derives most of its energy needs for manufacturing and electricity from the natural gas it gets from Russia, said Atul Vashistha, chairman and CEO of supply chain risk intelligence firm Supply Wisdom.

"If tensions continue to rise and we see an increase in disruptions due to a potential war or sanctions, it will hold back manufacturing production in Germany. Factories would need to curtail production which would cascade to manufacturing in other countries," he told CNBC in an email.

Top exports from Germany include autos and auto parts, other transport equipment, electronics, metals and plastics.