Consequences of war on supply chain and relative disruptions
For the Ukrainian people, the war is a humanitarian tragedy, but it also has a significant economic impact on the world. The direct effects of the war on international trade and investment are the main topic of this essay. The main issues raised in this study are how trade and welfare, particularly in developing nations, will be impacted in the near future. Which industries are experiencing the most disruption? The war comes at a critical juncture in the global economy. Because COVID-19 outbreaks are still occurring and there is less political support, the recovery from the pandemic-induced recession is sluggish. Many nations are experiencing rising inflation, so major economies are raising interest rates to try to stop it. Growth in developing nations will be constrained by disruptions in international trade and investment, and price pressures will rise as a result, particularly if governments impose trade restrictions to protect their economies. The war's immediate impact is felt in the food and energy trade. In terms of producing and exporting wheat, corn, barley, sunflower seeds, and sunflower oil, Russia and Ukraine are among the top seven nations in the world. Along with fertilizers and agricultural products, Russia is a significant supplier of fossil fuels like crude oil and natural gas. Prices rise as a result of interruptions in these supplies, which has detrimental effects on world trade, prosperity, and asymmetrical effects on exporting and importing nations. Higher commodity prices, rising production, and increased shipments are helping exporters offset some of the decline in exports from Russia and Ukraine.