Manoj Singh-General Manager | Nynas
Russia – Ukraine war has created a very bad situation for the world economy. Russia is the biggest supplier of crude oil and industrial gases to the entire Europe. With this war US and Europe has imposed sanctions on Russia which has led to crisis in that region and has changed the world dynamics. Since Gulf and US not increasing their production of crude oil, the prices have risen up & crude may touch $ 160 level in a week time , if situation doesn’t improve .
Since India has dependency of 80-85% on crude import, which is already at $130, it will highly affect the inflation rate in the country. Other factor is Industrial gas prices , which are gone up 2-2.5 times in the last few days and are at all time high level since World War II.
This will have a combined effect on price for imports of raw materials from Europe, which is already witnessing increase of more than double & expected to go up further. Industries like Paints, Polymer , Additives , Petrochemicals , Edible oil , Tyres , Metals etc started witnessing a massive increase in their raw material import cost from Europe .
This has caused panic in the industry and customers are extremely concern about their raw materials’ supplies from the European countries to keep running their businesses. To secure their supplies customers are also ready to pay high prices.
But since it’s a war situation Europe will focus on securing their Europe supplies and this would affect the import contract signed with European countries. This is already happening and it has created panic in the market. No doubt, this war will have a long term impact on the world economy.