Crisis in Crimea could come home to roost
Published 05/03/2014 | 09:00
Abit of geopolitical tension a couple of thousand miles away might seem far removed from our day-to-day business but the truth in the case of Ukraine is that we might start to feel the impact in a matter of days.
The stand-off between it and Russia is still in the early stages but has become serious enough to worry global commodity markets, and with good reason.
Firstly gas, a product which Russia not only supplies in great quantities directly to Ukraine but also one which passes through Ukraine's pipelines on its way to many European countries.
Russia has already hiked the price it is charging Ukraine and has the ability to "turn off the spigot" – as it did back in 2006 and again in 2009 in a couple of price-related spats – if it really wants to.
Nowadays only about 15% of Europe's gas needs come through Ukraine so the effects won't be as dramatic but the mere mention of tension between it and its most influential neighbour has been enough to send prices north.
That will eventually trickle down to the price of our energy – whether we use gas or other types of fuel – and eat into our disposable income.
And so will the price of bread.
Wheat futures on world markets have soared over the last few days as tensions between the two regions have ramped up.
That's because the Black Sea region accounts for a huge proportion of the world's grain supply, with Ukraine alone growing 20m tonnes of wheat each year.
That has already impacted prices in Northern Ireland and will add to the price you have to pay for bread and other products made out of flour and also further add to the burden of livestock farmers here who'll have to pay up for animal feed.
These are only two factors which mean the stand-off between the two regions isn't as far removed from us as it seems, and doesn't even take into account the sharp sell-off in world stock markets over the last two days.
So keep your eyes glued because in this increasingly globalised world, we're all impacted by geopolitical stand-offs of this size.