The ongoing war between Russia and Ukraine is sure to change the way things have been going. New trade patterns will be formed, new challenges will arise. Whatever the outcome is, the one who is prepared to face the results is sure to have fewer problems and more benefits. Following are some of the data, related to war outcomes, collected by our team from various sources online.
- A few days ago the Commerce and Industry Minister of India, Piyush Goyal said that, as per the feedback received from the industry, exports of certain products such as pharmaceuticals, telecom instruments, tea, coffee, and marine goods from India are likely to be affected due to the ongoing Russia-Ukraine conflict.
- Major items of export from India to Russia are pharmaceuticals, telecom instruments, iron and steel, tea, and chemicals, while imports include petroleum, pearl, semi-precious stones, coal, fertilizers, and vegetable oils.
- Major items of export from India to Ukraine are pharmaceuticals, telecom instruments, groundnut, ceramic, iron and steel, while imports comprise vegetable oils, fertilizers, inorganic chemicals, plastic and plywood, and allied products.
- The economic sanctions on Russia were imposed quickly. Five major Russian banks have been barred by Europe and the US from the SWIFT global messaging system(SWIFT system lets banks communicate with each other across borders about payments and transfers between them, a sort of financial SMS confirmation system).
- The Director General and CEO of the Federation of Indian Export Organizations (FIEO), Ajay Sahai, said that receiving payments for exports to Russia will now be a big problem. There are about $400 million in unrealized receipts for exports that have already been shipped. Most of that is from Russia. Hence, the financial consequences can be steep for exporters.
- Pre-shipment credit is typically accompanied by insurance cover from the Export Credit Guarantee Corporation (ECGC), and post-shipment credit has high penalties if payments are not received on time. So, unless the government asks banks to relax the penalties and payback periods until the situation is resolved, the costs for exporters can be crippling.
- Russian companies have offered to pay through third countries like Turkey, but the ECGC and banks insist that payment through third countries should be part of the agreement when the contract is initiated, that is before shipment is made. Unfortunately, that provision probably is absent in most contracts.
- Product prices are increasing and these hikes are not restricted to oil and gas or energy. Over the past few months, all commodity prices have raised steadily. Rising prices of three metals are of major concern: steel, aluminium and nickel. In addition, coal is a significant factor in the production of the first two. On March 4, aluminium hit a record $3,850 a tonne, an increase of 13 percent in just a week, on the LME(London Metal Exchange), and nickel reached an 11-year high.
- The hike in steel prices could be beneficial for India. About 11 percent of seaborne global steel exports are from Ukraine and Russia. Most of it is intended for Southeast Asia, and the crisis will disrupt their supply. This can be an opportunity for Indian steelmakers to enter that market.
- Ukraine and Russia account for a third of global wheat and barley exports, which countries in the Middle East, Asia, and Africa rely on to feed millions of. They are also top exporters of other grains and sunflower seed oil used for cooking and food processing. About half of the grain the World Food Program buys to feed 125 million people worldwide comes from Ukraine.
- Both Ukraine and Russia are major exporters of wheat with more than 25 percent share in global trade; disruption of exports from these countries provides India an opportunity to increase its outbound shipments of the crop. Prime Minister Narendra Modi recently said that India should seize the opportunity to export wheat of the best quality, as demand surges amid Russia's invasion of Ukraine.
- Australia and India have responded with increased grain exports, but there’s little room for others to immediately do the same.
These news are collected from various sources on internet and put together for our readers.
