By Vanessa Ferreira
The conflict between Ukraine and Russia completed two years last Saturday, February 24th. This date marks a period of reflection on the impacts on the commodities market, especially in the agricultural sector. In addition to the devastating humanitarian consequences, this conflict has redefined the dynamics of the global economy, significantly influencing agribusiness and commodity logistics.
To deepen our understanding, we conducted interviews with customers and partners from both countries, seeking to understand the consequences of this confrontation.
Impacts of war on agribusiness
A guerra resultou em uma redução das áreas cultiváveis na Ucrânia devido aos territórios ocupados e à presença de áreas mineradas, levando a uma diminuição na produção agrícola. Esses efeitos são agravados pela destruição da infraestrutura logística, incluindo portos e principais rotas marítimas, complicando ainda mais a exportação de commodities. Em contrapartida, a Rússia enfrenta desafios semelhantes, com a dependência de sementes importadas e sanções internacionais afetando negativamente o setor agrícola. A desvalorização da moeda e o aumento dos custos de produção intensificam esses problemas, reduzindo as margens de lucro dos agricultores e desincentivando a expansão das plantações.
Adaptation and resilience strategies
Ukraine, facing export challenges due to the Red Sea conflict, innovated by using ports from neighboring nations such as Romania, Bulgaria and Poland, diversifying its foreign trade routes. Although this strategy strengthened the logistics infrastructure of these intermediary countries and guaranteed the continuity of Ukrainian exports, it generated local tensions. Producers from transit countries expressed dissatisfaction with unfair competition, resulting in border strikes and new duties on Ukrainian products, aiming to balance competition with national products. Russia, in turn, responded by diversifying its export markets and developing alternative transport routes, mainly through Russian territory and towards China, reducing dependence on traditional maritime routes and minimizing the effects of sanctions.
Both countries face challenges in maintaining and establishing new trade partnerships. Ukraine has struggled to maintain its traditional export markets, while Russia, according to Alexander Kalinin of Advag Russia, has managed to expand its interactions with countries outside the European market, strengthening trade relations with China, North Africa and the countries of Middle East. This reorientation of trade reflects a strategic adaptation to the new geopolitical and economic realities imposed by the war.
Future perspectives
In the long term, the war in Ukraine and its global fallout will likely continue to influence the commodities market. Furthermore, agribusiness and logistics in the countries involved will have to continue adapting to a constantly changing environment. On the other hand, the capacity for innovation, the diversification of export markets and the improvement of logistics infrastructure will be crucial to overcoming the challenges posed by war and international sanctions. Furthermore, the war also forces a reassessment of global supply chains and highlights the importance of resilience and flexibility in agribusiness and logistics operations.
We will continue to closely monitor the evolution of this conflict and its consequences for agribusiness, aiming to keep you updated. Follow us on social media or consult our experts for more information.
