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While Scott Morrison has promised to send weapons to Ukraine, sanctions on Russia have hit Australian farmers

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  • Prime Minister Scott Morrison said Australia has now committed to providing weapons to Ukraine through NATO.
  • The Russian invasion of Ukraine has hit global markets and supply chains.
  • The cost of wheat may skyrocket by more than 60%, impacting Australian farmers, analysts warn.

Australia will supply military aid in the form of weapons, Prime Minister Scott Morrison announced over the weekend, bolstering the nation’s previously announced sanctions in response to Russia’s invasion of Ukraine. 

However, the supply chain fallout could ultimately hurt Australian farmers as key food supplies out of Russia and Ukraine are halted.

It comes as Western nations stepped up support for Ukraine as the conflict intensified over the weekend and Russian forces entered Kyiv, the country’s capital, on Sunday.

Australia is committed to providing weapons, non-lethal military equipment, and medical supplies to Ukraine.

The country will work with NATO to deliver weapons to Ukraine, Morrison announced on Sunday.

Treasurer Josh Frydenberg on Monday said Australia’s first payment of arms aid to Ukraine will be in the “millions” of dollars, with the details of payments to be given later today.

“We are working through those details with our NATO partners,” Frydenberg told ABC radio.

“It’s not going to be the same sort of quantum that the US or the UK would provide.”

Australia had already committed to sending non-lethal aid in the form of military equipment and medical supplies but ruled out sending troops.

The country’s sanctions against Vladimir Putin and senior members of his government came into effect on Monday after being flagged over the weekend.

Travel bans and financial sanctions have been imposed against the Russian President, Foreign Minister, Defence Minister, Prime Minister, and Internal Affairs Minister.

The federal government had been seeking advice from the Department of Foreign Affairs and Trade on how to design the sanctions after countries including the US and UK announced they would target the individuals.

Australia will also announce a broader package of humanitarian support for Ukraine on Monday, Morrison told 4BC radio.

The “important and significant” package will assist Ukraine as well as neighbouring countries such as Poland that are taking refugees from Ukraine, Morrison said. 

“We will be making a further announcement about broader humanitarian support,” he said. 

Frydenberg also said Australia tempered its sanctions because of Europe’s reliance on Russian energy, but the sanctions imposed will still be effective.

“It’s about isolating Vladimir Putin and his cronies from the international financial system,” he said.

The announcement of military support follows a raft of new measures imposed by Western leaders after Russian troops entered Ukraine on Thursday morning. 

On Sunday, US President Joe Biden approved $US350 million worth of weaponry for Ukrainian fighters, adding to a significant quantity of weapons already sent by the US along with the UK and several European nations. 

European Union officials said it would purchase €450 million in weapons for Ukraine in addition to further sanctions announced on Friday by Western leaders including the US, UK, and EU.

War in Ukraine threatens global food supply chain

Russia’s invasion of Ukraine lashed global markets amid uncertainty over the conflict’s potential impact on inflation, the operations of multinational corporations, energy prices, and the flow of energy to Europe. 

In Australia, wheat growers have been told prices could surge by up to 50% as the conflict restricts the supply and export of wheat from one of the world’s largest suppliers.

Russia and Ukraine combined account for nearly a quarter of the world’s total exports, and as of Thursday wheat futures were up nearly 6%, bringing the year-over-year increase to 37%. 

The price increase is likely to hurt developing nations, where people spend bigger fractions of their incomes on food.

Agribusiness banking specialist Rabobank has said global prices could rise another 61% from current levels, with Australian wheat exports likely to see rapidly rising demand. 

“In order for Australian wheat prices to more closely follow higher global prices, Australia would need to increase our export capacity,” it said in a statement. 

Brett Hosking, chair of the industry body that represents Australian grain farmers, GrainGrowers, told the Sydney Morning Herald and The Age it was unlikely Australian consumers would suffer from price increases, but higher prices may not ultimately benefit Australian farmers.

There was a “little window of opportunity to take advantage of higher prices,” Hosking said, but “not every country in the world that buys grain has the ability to pay the higher prices”.

Economists have also warned war in Ukraine will likely result in a more cautious response by the RBA on raising interest rates when its board meets on Tuesday. 

It is expected to keep the cash rate at its record low 0.1%, in line with previous projections that have most analysts in agreement that a rate hike will likely not occur until August this year. 

In response to four days of conflict, on Monday the UN Security Council adopted a resolution to call for an emergency session of the General Assembly.

It will convene within the next 24 hours, marking the first time such a session has been called in decades, said US Ambassador Linda Thomas-Greenfield. 

“This is not an ordinary moment,” she said. “We need to take extraordinary action to meet this threat to our international system and to do everything we can to help Ukraine and its people.”

1 Comments

  • Ivars

    Ivars

    4:15 AM, 30-03-2022

    I noticed less food items in the store too.

    0 Reply

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