SINGAPORE: The Russia-Ukraine turmoil has caused a good exponential rise in the cost of commodities, given that the 2 warring countries are usually essential exporters of non-renewable fuels , food grains , fertilisers and alloys. Disruptions in the supply of these commodities have drastically impacted the global economy, which includes in Southeast Asian countries.
In 2020, the Association of Southeast Asian Nations (ASEAN) imported 9. seven per cent of its fertiliser from Russia plus 9. 2 percent of its cereals from Ukraine. According to the World Bank, the conflict will cause global prices of energy and meals to rise by fifty per cent and 20 per cent respectively in 2022. The inflation rate for ASEAN as a group increased through 3. 1 per cent in 2021 to 4. 7 percent in 2022.
COMMODITY CRISIS UNDERMINES CLIMATE GOALS
Along with stunting economic growth, the commodity crisis is already undermining Southeast Asia’s climate goals.
To lessen inflationary pressures, the particular Philippines recently doubled its fuel subsidy programme for community transport and also programs to increase the use of fossil fuel in electricity generation. Malaysia’s oil subsidies can reach greater than US$6 billion this season, while Indonesia has ramped up coal exports . Thailand plus Vietnam also lately increased fossil fuel subsidies.
ASEAN’s renewable energy target of 23 per cent simply by 2025 is also influenced by supply shocks of critical minerals that may enable the changeover to green power.
Since economic sanctions against Moscow have not used their full effect, Russia is still the particular world’s largest exporter of nickel plus palladium. Nickel is a crucial component of batteries that will power electric vehicles, while palladium can be used to produce catalytic converters — a part of the car’s exhaust system that controls emissions.
Following United States sanctions on Russian federation, the price of nickel and palladium increased by as much as 60 per cent plus 25 per cent respectively, which led to concerns about the economic viability of renewable energy systems.
Ukraine is the world’s top supplier of fluorescents gas, which is used meant for producing semiconductors — critical components of electrical vehicles and conversation technologies.