Russia’s war on Ukraine is continuing to boost food prices. While the US and European countries are engaged in economic warfare against Moscow, it appears Russia’s turn to strike back has emerged.
On Thursday, Russian Minister of Industry and Trade Denis Manturov said Russia decided to suspend fertilizer exports. This comes when global food prices are at record highs and European fertilizer makers are struggling to produce nutrients ahead of the spring growing season, increasing global food inflation risks.
President Vladimir Putin said the fertilizer export ban was a move to ensure stable domestic food prices. This is another sign of growing protectionism worldwide as countries grapple with soaring food prices. Putin said fertilizer markets are deteriorating, making food a lot more expensive.
Notably, Putin added that Russia has agreements with “friendly countries” on fertilizers.
Making matters worse, Interfax, an independent Russian news agency, reported earlier that Moscow is considering retaliatory economic measures to ban exports of certain agricultural products to countries outside the Eurasian Economic Union.
Interfax said Moscow could temporarily ban grain exports to the Eurasian Economic Union (EEU) and ban sugar exports beyond the EEU. This may result in declining food supplies for those countries and soaring food costs.
Add this to the fertilizer ban and Europe and maybe the West is headed for a major food crisis.
Possible Russian retaliatory measures follow a series of Western sanctions on Russia, which have collapsed the ruble, locked the central bank out of a large chunk of its foreign-currency savings, and crushed its ability to trade with the outside world by removing certain Russian banks from SWIFT.
Russian President Vladimir Putin has been quoted well before the invasion of Ukraine of the need to strengthen an emerging multipolar world order.
“It is important to maintain and boost mutually respectful, constructive and effective cooperation globally, as well as to strengthen the emerging multipolar world order that consists of independent centers of economic growth and political influence, which certainly includes BRICS,” Putin emphasized.
It’s early to declare if Western sanctions will paralyze Russia, but what appears to be happening is that the global economy is becoming more fractured than ever as a great power struggle between the West and East flourishes.
Earlier this week, Russian banks that were cut off from SWIFT turned to China’s state-owned UnionPay system. Also, Russian Foreign Minister Sergei Lavrov said Thursday its oil and gas firms have other buyers as many Western nations halt or wind down purchases for energy products.
The global economy is splintering, and Russia could be inclined to unleash retaliatory economic measures outside the Eurasian Economic Union. This area in Eastern Europe, Western Asia, and Central Asia, is also home to some of China’s Belt and Road Initiative, also known as One Belt One Road… and likely includes numerous so-called “friendly countries” including China.
Meanwhile, China FM Spokesperson, Zhao Lijian, was quoted earlier today as saying Beijing will retaliate with a “serious response” if the US hits sanctions on China over Ukraine.
Things are getting a little bit out of control.