The war in Ukraine is wreaking havoc on global supply chains. Western sanctions in response to the invasion, price shocks resulting from Russia’s weaponisation of energy, and disruptions to goods shipments have punctured normal procurement practices. The reverberations are being felt across the span of global industries — but the effects on the chemicals and agribusiness sectors have been particularly severe.
“Energy-intensive industrials and European fertiliser producers are the two groups that have been hit the most,” says Sebastian Bray, lead chemicals analyst at German investment bank Berenberg. “Any chemical company that is power or gas intense has generally not had a good past few months.”
The world had come to rely on Russia for much of the energy and raw materials that power the food chain and global industries. Though accounting for less than 3 per cent of global gross domestic product, Russia, Ukraine and neighbouring Belarus play an outsized role as producers and exporters of agricultural commodities, minerals, fertilisers and energy.