How will the Russian invasion affect you?
Many Australians will be watching the Ukraine invasion with deep empathy while others will be saying "how does it affect me?"
Russia’s invasion of Ukraine has the potential to change life in several ways. And for those mostly concerned with hip-pocket issues, bottom lines look to be inflated during and possibly after the conflict.
And the biggest price rises may well occur in common specific goods and services.
Writing for PBS NewsHour, economist William Hauk says sanctions that the international community is placing on Russia are likely to cause prices of some goods to spike. And the longer the war drags on, the higher prices could climb.
In addition, Ukraine provides some important goods to the world that now may be in short supply for some time to come, leading to higher prices.
Brent crude oil prices have already shot up to more than US$100 a barrel. Which means higher petrol prices in Australia.
Petrol prices were laready on the up, but the conflict will create chaos with oil supplies in the conflict region, meaning we can expect that trend to continue.
Ukraine is a major supplier of many minerals and other commodities. And as soon as Russian troops entered the country, Ukraine’s currency began to decline in value, which will lead to an "increase the cost of their exports,” Dawn Tiura, president at Sourcing Industry Group, told CNBC.
Many elements crucial to the manufacture of semiconductors, jet engines, automobiles and medicines also come from Russia, but may soon be stymied.
Russia and Ukraine are two of the world’s top exporters of wheat and the invasion could impact the 59 million metric tons of wheat the two nations export annually.
“The price impact of the withdrawal of such amount of wheat would be extraordinary, especially because the demand for human consumption of wheat is very inelastic,” says senior commodity analyst at RaboResearch Carlos Mera.
Ukraine is also a major producer of corn, and China is also a big recipient of Ukrainian corn, which means corn and prices of products reliant on corn could soon soar.
Russia’s invasion of Ukraine could lead to higher inflation.
Just when you thought we may be coming out from the shadow of global chaos, eh? We'll let you comment in that!
Perhaps Australians need to think about being more self sufficient ... grow a few veg and fruit in the back yard.