Egypt is not an obvious victim of Russia’s invasion of Ukraine. But as the world’s biggest consumer of wheat, much of which is grown in Russia and Ukraine, it may find itself caught in the crossfire. Combined, the two countries export almost a third of the world’s supply. Egyptians, along with other global consumers, now face higher prices. By the morning of February 24th, when Russia’s invasion began, wheat prices had risen by 20% since the start of the year, as investors have feared that sanctions and conflict might disrupt global supply.

Wheat is not the only commodity to have climbed in price. Russia provides Europe with much of its fuel: it is the world’s second-largest exporter of oil and the biggest exporter of natural gas. Energy prices have spiked accordingly. Oil prices jumped above $100 a barrel for the first time since 2014 on February 24th. European natural gas prices shot up by 30% in early trading, which will affect other markets. The share prices of gas-tanker manufacturers rose after Germany mothballed the Nord Stream 2 pipeline, built to carry more Russian gas to Europe, on February 22nd. Investors reckon that the continent will need more tankers as it increases its reliance on liquefied natural gas.

Russia’s presence in mining has also sent metal prices skyward. In 2020 the country produced 43% of the world’s palladium, a component of catalytic converters in cars. The metal’s price has risen by 40% this year. Russia also produces 11% of the world’s supply of nickel and a smaller share of aluminium and copper.

Higher commodity prices could boost Russia’s export earnings—as long as sanctions allow other countries to buy from Russia. That benefit will not outweigh the damage being done to Russia’s economy, reflected in a falling stockmarket and currency. The stockmarket plunged on February 24th and has lost half its value this year. The rouble has fallen by 11% against the dollar. But Vladimir Putin, Russia’s president, may take some comfort in the knowledge that his people are not the only ones hurt by his actions. ■

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