But how about the Ukrainian economy? Like Australia, and Russia, Ukraine is a big wheat exporter so any invasion could cause a spike in the world wheat price, as occurred during the Crimea crisis of 2014. As the former Soviet Union’s bread basket, Ukraine has the world’s most fertile soil and 70 per cent of the world’s supply of chernozem (fertile black earths that can deliver high agricultural yields). So the crisis could impact global food supply chains as well as oil and gas.
How will it affect Australia? Not much directly, as if anything Australia is a competitor to Russia with gas and a competitor to both Russia and Ukraine with wheat. The higher prices may boost some exporters in the short run but they would soon be overrun by the adverse impact of global economic disruption.
There is also a danger if Russia retaliates against Australia with its own trade sanctions. Not that this would be top of mind at the Kremlin. I…
