Besides the fact that the war between Russia and Ukraine is a humanitarian tragedy, military conflict should cause changes in global trade and benefit the military equipment industry as well as commodity producing countries such as wheat, corn or oil.
According to experts interviewed by the Council of State UOLThe gap in the export of the products produced by the countries directly affected by the war and the increase in the demand for other products should strengthen some items. Some exporting countries, for example, Australia, China, France and Nigeria will also win.
“In the short term, countries that provide inputs produced by countries directly or indirectly involved in the conflict tend to benefit,” said Carla Argenta, chief economist at CM Capital.
According to Ricardo Rocha, professor of economics at Insper, countries like China and Australia, for example, could benefit from the appreciation of some of the main products that countries sell throughout the year.
“Commodity producing countries have a differentiation regarding food, ore or oil. So yes, these countries should get stronger,” he said.
Experts listed some sectors that may emerge stronger from the conflict between Russia and Ukraine. Look:
Sweetcorn
Ukraine was one of the world’s leading corn producers. According to experts, with the war, the country should reduce its food supply and make room for countries such as the USA and Argentina.
Conab data shows that Ukraine exported about 18.7 million tons of corn last year. The export leaders are the USA (54 million tons) and Argentina (33.5 million tons). The two main producers must win the market, which Ukraine will no longer supply, and benefit from lower production and higher prices.
“Obviously, these countries are benefiting from this commodity, as a result of commodity prices rising so much due to scarcity,” said Thiago Guedes, economist at AMG Capital.
war industry
In addition to food production, the arrival of war in Europe decades later should also spur the sale of arms across the continent.
“The direct result of these disagreements is an increase in the arms race that will benefit the main countries around the world that produce weapons, aircraft and other military equipment,” said Thiago Guedes, economist at AMG Capital.
According to Guedes, the main beneficiary should be the USA, the world’s largest arms dealer. Russia is the second largest exporter and France is expected to benefit as well.
According to data from the Stockholm International Peace Research Institute (Sipri), the US sold US$ 10.6 billion in arms last year, while France, in third place, sold about US$ 3.9 billion.
Wheat
Countries directly involved in the conflict are also major wheat producers. According to Conab data, Russia ranked fourth with 72.5 million tons in production last year, while Ukraine ranked sixth with 33 million tons.
Between the destruction of Ukrainian production and Russia’s export difficulties during the conflict, countries that already own a large part of the production must become part of the market.
According to Alex Agostini, chief economist at Austin Rating, China, which produced 136 million tons last year, and India, with 108 million tons, lead the production rankings and are expected to increase exports.
ore
According to an analysis by XP Investimentos, the decrease in ore production along with the price increase should support the sector.
Additionally, Russia and Ukraine are related ore pellet producers. The material is a heap of ore used in steelmaking. The two countries together concentrate about 30% of the supply of this product on the steel industry.
With the war, there are doubts about production, which has increased the price of the commodity by about 30% this year, among other reasons.
For example, Metinvest, which is controlled by Ukraine’s richest man Rinat Akhmetov, said it curtailed more than half of its iron ore production after the Russian invasion of Ukraine.
So much uncertainty in production should enable Australia, the world’s largest exporter of iron ore, to capture some of the market that is not supplied by the countries.
Oil
The war caused many countries to stop buying Russian oil. Countries such as Canada, the United States, the United Kingdom, and Australia have banned oil imports from the country.
The problem is that Russia is the world’s third-largest oil producer after only the United States and Saudi Arabia, and all the uncertainty about Russia’s ability to extract commodities has caused prices to soar.
Therefore, according to Austin Rating chief economist Alex Agostini, high oil prices and the gap in Russian production should lead to new investment in the sector and also create an opportunity for smaller countries to meet this demand.
Considering that oil is on the rise, it is one of the sectors that gained value in the product and needs to be strengthened with investments to be made.
Therefore, according to experts, countries whose economy is more dependent on oil exports, such as Saudi Arabia and the United Arab Emirates, or countries with large reserves such as Venezuela and Nigeria can benefit from it.
Venezuela has the largest oil reserves on the planet with 25% of the total, according to the latest data from OPEC (Organization of the Petroleum Exporting Countries). Nigeria is second only to Middle Eastern countries and has 3% of the reserves.
source: Noticias
