Russia’s invasion of Ukraine has entered the second month. Buoyed by the US and Europe’s aggressive supply of arms, Ukrainians have put up a stiff resistance, stalling Russian tanks from entering the capital city of Kiev and, in the process, disproving military pundits who had predicted a short and lopsided war.
A protracted war in the Black Sea region and extended sanctions against Russia entail risks of economic upheaval across the world — and India will not be spared. New Delhi is already bearing the brunt of high global crude oil prices (about $110-120 a barrel as against $70 in the beginning of November) as well as rising mineral, metal and edible oil prices, indicating a possible scenario of high inflation and low growth — stagflation.
Against this macroeconomic backdrop, the war in Ukraine has created an unlikely opportunity for select Indian agri-exporters who trade in wheat, maize, millet and processed food. Since the crisis unfolded last month, the world has been looking to Indian wheatto fill the huge void in stocks caused by the turbulence in Europe’s breadbasket. Ukraine is one of the world’s top wheat exporters, and Russia and Ukraine together have a 25% share in the global wheat market.
In the case of maize, Ukraine accounts for 13% of the global trade, with half its export consignments moving towards the lucrative European Union market. A ban on Russian flights to Europe also means opportunities for Indian exporters of processed food —nuts, fruit juices, confectionary, pulse and cereal preparations, among others — according to an analysis by the Agricultural and Processed Food Products Export Development Authority (APEDA), an agency under the Union ministry of commerce and industry. ET has perused the document.