Skip to content
    1. Overview
    2. Alternative Managers
    3. Consultants
    4. Corporations
    5. Family Offices
    6. Financial Advisors
    7. Financial Institutions
    8. Individuals & Families
    9. Insurance Companies
    10. Investment Managers
    11. Nonprofits
    12. Pension Funds
    13. Sovereign Entities
  1. Contact Us
  2. Search

Subscribe to Economic Trends & Insights

Discover our latest insights on all economic news, from breaking headlines to long-term trends.

Follow Carl Tannenbaum

Discover the latest economic insights from our chief economist on social media.
Global Economic Research

Heavy Metal Diplomacy

Losing Russia and Ukraine's commodity exports is a risk to supply chains and inflation.

Last week, we discussed how the Russian attack on Ukraine will affect energy markets. But as we dive in deeper into the evolving circumstances, the conflict threatens to disrupt the supplies of a broad range of commodities from food to metals.

Russia is a key producer of agricultural products like wheat, fertilizers and sunflower oil. Ukraine is the second-largest grain exporter and a major shipper of sunflower oil; its fertile farmland earned it the nickname of “the breadbasket of Europe.” Together, the two nations account for 29% of global wheat exports, 80% of sunflower oil and 19% of global corn supplies.

Russia also has substantial reserves of metals including palladium, copper, nickel, titanium and steel. Moscow is the world's largest supplier of palladium and the second-largest source of titanium and aluminum after China. The prices of all of these have been surging. 

Commercial shipping from Ukraine’s ports has been suspended after the attacks.  Russia suspended vessels on the Azov Sea, but ports remain open for navigation in the Black Sea, a key channel for grain, oilseed and metal shipments. It will be difficult to restore normal maritime operations while hostilities are active. There has also been speculation that Moscow could curb the supply of raw materials or commodities, but such a move would inflict more damage to the domestic economy as exports account for nearly 28% of Russia’s gross domestic product, with half in non-energy goods.

No direct sanctions have yet been announced on specific commodities or producers. This is likely a lesson learned from the 2018 U.S. curbs on Russia’s top aluminum producer, which led to global supply shortages and higher costs. But financial restrictions are likely to disrupt the flow of impacted commodities. As an example, China’s state-owned financial institutions are reportedly restricting offshore financing for purchases of Russian goods.

Disruption in the supply of commodities will add to supply chain and inflationary pressures.

Weekly Economic Commentary - Chart 4

Disruptions in commodity sectors in which Russia and Ukraine have significant market shares will add to supply chain and inflationary woes, dampening growth prospects. Moscow’s titanium is a critical component of jet engines in the aerospace industry. Palladium is vital for automotive production. Usage of sunflower seed oil extends beyond the food industry to personal care items. Major agricultural markets like Brazil and China rely on Moscow for over a fifth of their total fertilizer imports. Finding alternate suppliers for some of these goods won’t easy.

Sanctions have the intent of inflicting economic pain to bring Russia to heel. If they lead to shortages of food and metals, the pain will spread quickly through the global economy.

Information is not intended to be and should not be construed as an offer, solicitation or recommendation with respect to any transaction and should not be treated as legal advice, investment advice or tax advice. Under no circumstances should you rely upon this information as a substitute for obtaining specific legal or tax advice from your own professional legal or tax advisors. Information is subject to change based on market or other conditions and is not intended to influence your investment decisions.

© 2022 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability in the U.S. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. For legal and regulatory information about individual market offices, visit


Vaibhav Tandon portrait

Vaibhav Tandon

Chief International Economist
Vaibhav Tandon is the Chief International Economist within the Global Risk Management division of Northern Trust. In this role, Vaibhav briefs clients and colleagues on the economy and business conditions, supports internal stress testing and capital allocation processes, and publishes the bank's formal economic viewpoint. He publishes weekly economic commentaries and monthly global outlooks.


Russia's actions will have immediate and long-term ramifications.

What are the consequences of taking Russia's international payments offline?