Supply chain implications of the Russia-Ukraine conflict
Supply chains are once again being tested, this time by the extraordinary events in Ukraine. The time has long since passed when supply chain disruptions can be treated as one-off events, with organizations scrambling to mitigate the disruption to their business and to keep goods, funds, and information flowing across the supply chain. The conflict in Ukraine reinforces the imperative for most organizations to have in place more resilient supply chains. Among the most pressing vulnerabilities is an overreliance in Europe on natural gas and crude oil from Russia, as well as dependence on both Russia and Ukraine for key agricultural commodities. According to the Food and Agriculture Organization of the United Nations, Russia and Ukraine account for more than 25% of the world’s trade in wheat and for more than 60% of global sunflower oil and 30% of global barley exports. Russia is also a major global exporter of fertilizers, which means any supply shortages, or restricted access, could impact crop yields globally.