Gas, wheat, oil … what are the possible economic implications for the French?

The quantity is guaranteed, but the price is soaring. The intensifying conflict between Russia and Ukraine panics stock market prices. Vladimir Putin sends his troops to Ukrainian territory at dawn on Thursday, February 24, three days after admitting the independence of the two pro-Russian separatist “republics” of Donbas, Donetsk and Lugansk. I decided to.

>> Follow the evolution of the conflict between Russia and Ukraine in our lives.

On Tuesday, the European Union approved at “Unanimous” Economic sanctions on Russia. Faced with a new stage reached on Thursday, along with NATO and allies within the G7 “Full package of the toughest penalties” German Foreign Minister Annalena Baerbock told Moscow. Franceinfo notes the potential consequences of this highly volatile situation on the French economy and the prices of certain key resources.

Gas: Keep prices frozen

Russia, which is rich in gas, possesses diplomatic weapons. It has the largest reserves in the world and is the second largest producer after the United States. If about 46% of the gas imported by the European Union is from Russia, its share will rise to more than 70% in certain countries of Eastern Europe, but Russia’s gas consumption in France is much higher. It is less than about 24%. According to the Senate briefing report.

“There is little exposure to the Russian market. It is 1-2% of France’s imports and exports. (…) The Russian market is not a strategic market for France.”On Wednesday’s BFMTV, he assured Minister of Economy Bruno Le Mer in a statement not related solely to gas.

Russia has promised to supply a defined amount of gas in its gas contract, but its distribution can be adjusted to take advantage of Europeans’ dependence on that gas. And the sanctions decided by the West could affect Russia’s gas supply, such as Germany’s shutdown on Tuesday of a test run of the Nord Stream 2 gas pipeline, which was to be linked to Russia.

In fact, prices are starting to skyrocket again. Only on Tuesday The market took about 10 percent. “After that, he pointed to Professor Philippe Charmin of the University of Paris-Dofine, who was interviewed in France2.

If Russia shuts off the valves of its three gas pipelines to Europe, France could import more gas from other suppliers, Norway or Algeria, but production is limited. There is also the possibility of turning to liquefied gas imported by boat, but this approach is longer, more expensive and difficult to maintain in the long run.Qatar, still one of the world’s leading gas producers, declared on Tuesday:“No country can replace such an amount.”

Can France’s gas bill explode?Bruno Le Mer has guaranteed that the government will maintain “Personal gas prices freeze in all situations”, During a hearing at the Senate Finance Committee on Tuesday. The block of personal gas prices was decided in October as part of that. “Tariff Shield” Introduced to combat inflation. “We will hold it for the next few weeks regardless of gasoline price.” The Minister of Economy insisted.

Oil: possible surge

Even before the Russian army entered Ukraine, the price of Brent, a type of crude oil used as a standard for fixing global prices, was soaring due to fear of open conflict. Barrel prices on Thursday exceeded $ 105 for the first time since 2014.

However, the sanctions that the West has adopted against Russia do not currently threaten Russia’s hydrocarbon exports, the country’s main source of revenue. “The sanctions imposed today, and those that may be decided soon, do not cover oil and gas flows.”Anonymous American officials World (articles reserved for subscribers)Wednesday. “”I want a market [mondial] There is no need to raise prices at this time. ”

According to him, consuming countries and the Organization of Petroleum Exporting Countries (OPEC) are working together. “To deal with the sharp rise in prices.” However, the business community is afraid that Russia, the world’s third-largest oil producer after the United States and Saudi Arabia, will reduce production. Hydrocarbons are also a very powerful means of putting pressure on Europeans for Vladimirputin, of which Russia is the second largest oil supplier.

Wheat: “No fear” of shortage

Analysts and brokers told AFP Thursday morning that grain prices reached unprecedented levels in the European market and wheat peaked at Euronext at 344 euros per ton. Prices for wheat and corn, Ukraine’s fourth-largest exporter in the world, soared at the start of the season, hours after Russia’s invasion began.

This is especially an increase due to container charter and may continue. “In the event of a war, most exports will pass through the ports of the Black Sea, increasing the risk premium on sea freight and having a direct impact on the global market.” Michelle Portier, director of Agritel, an analytical firm specializing in the agricultural market, was contacted by France’s Amfo shortly before the invasion of Ukraine, warned.

What is the impact on France? “We are producers and we do not import from Ukraine, so we do not have to worry about wheat shortages.”Reassure Michelle Portier, “And this year we import very little corn from Ukraine”.. In contrast, “Currently, our greatest dependence is on the sunflower oil market, which imports more than 50% from Ukraine, the world’s largest producer.” He warns. This oil is used not only in food products, but also in the production of biofuels. Michelle Portier is confident in Ukraine’s grain production this year. “Ukraine is born of a record campaign in the production of grains such as sunflowers.”

But analysts “The real problem” In the case of the French agricultural food sector due to soaring gas prices: “We are so dependent on gas to produce fertilizer in agriculture, so any increase will affect the cost of grain production.” This can affect the selling price of processed products such as pasta, flour and bread at checkout.