Conflict between Russia and Ukraine: How are Imports and Exports affected?

According to economists, on the supply side, sanctions and supply chain disruptions can lead to a shortage of many basic commodities, thereby directly increasing input prices of businesses. . Many ports were blocked, oil prices increased, causing the Transportation – Logistic industry to increase prices, and faced many difficulties in freight forwarding.

Figure 1. Ukrainian soldiers search for unexploded warheads after fighting with Russian forces in the capital Kiev on February 26. (Photo: AFP/VNA)

On the supply side, sanctions and supply chain disruptions can lead to shortages of many basic commodities, which directly increases input prices for businesses. On the demand side, inflation can also slow down consumption and investment disbursement in the economy (including public investment), due to high prices and unpredictable fluctuations.

Directly affected companies may include businesses that depend on the price of basic goods as input materials but are unable to increase their selling prices to offset the increased raw material/transportation costs. Many of these enterprises are purely export enterprises.

In particular, businesses that rely too much on input materials will run the risk of direct supply shortages caused by Ukraine-Russia tensions, such as coal (one of Russia’s main exports). ), can have a big impact on profitability.

Airlines could suffer a double hit, as the cost of oil rises and routes are disrupted.

In addition to the specific risks mentioned above, the world macro risks in general can also indirectly affect the overall recovery momentum of the Vietnamese economy.

In particular, the transport and logistics industry will be the most affected object of the Russian-Ukrainian conflict. Most of the world’s goods are transported by ships.

If Ukraine and its ports are blocked, buyers will have to look for other routes to meet their shipping needs. And the US will be the first alternative, because it has the largest logistics warehouses in the world. However, this redirection will also cause delay in delivery time.

When gasoline prices increase, logistics costs will also increase, textile and seafood businesses will suffer many impacts. This can lead to the export situation of businesses being affected, increasing logistics costs. Profit margins of businesses will be affected by this problem.