Alex Yablon , Nicholas Mulder, Javier Blas in Phenomenal World:
The war in Ukraine has unleashed both geopolitical and economic strife, and nowhere is the latter clearer than in the volatile commodities market. Commodities prices have fluctuated wildly since the Russian invasion began and the US-led coalition retaliated with extraordinary sanctions on Russia’s financial system and trade networks. Few outside the American intelligence community expected Russia to invade; even fewer expected Russia’s rivals to so forcefully and swiftly confront the belligerent power with such a sweeping raft of economic sanctions.
While diplomatic relations with Russia have been deteriorating for more than a decade, the Western attempt to sever all economic relations with the country may mark a historical turning point. For the first time in decades, the world finds itself in an economic crisis originating not with the financial sector, but in the real economy. The economic disruptions of war itself and the breakdown of financial and trade ties with Russia—a global commodities powerhouse—have had repercussions around the world. Rising fertilizer prices are threatening the viability of Peruvian rice farms. The loss of Ukrainian neon production is driving up costs for Taiwanese chip manufacturers, already squeezed for capacity in recent years. The blockade at the port of Odessa threatens a general food crisis for the Middle East and North Africa. And the metals exchanges are in disarray as pricing chaos pushes margin calls ever higher.
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