How might the war in Ukraine affect the Munch economy?

There is a high risk of entering an inflationary cycle and therefore reducing our purchasing power. (© La Presse de la Manche)

“Our agriculture, our industry… Many sectors of the economy are suffering and will continue to suffer. Our growth, which is at its highest level today, will inevitably suffer,” the company said. President Emmanuel Macron in his speech dated March 2, 2022 From the beginning war in ukraineas well as economic sanctions against Russiathe French population is warned of the possible consequences for its purchasing power.

Gas: €200 per MWh.

Already, “the price of gas has increased 50 times compared to May 2020. It reached 200 euros per MWh. Thus, depending on the European countries, the impact varies, but we remain very vulnerable,” recalls Sandy Campart, financial expert at the University of Caen. Russia provides 40% of Europe’s gas needs. “This will inevitably increase the cost of other alternative energy sources. »

An alarming prospect, especially for companies. According to the Normandy CCI observatory, 36% of the 2,360 Normandy leaders surveyed are concerned about supply issues and, in particular, rising energy prices. The CCI is ready to offer solutions.

This is a factor that we are going to take into account, we are ready to help companies.

Gilles TreyPresident of the Norman Chamber of Commerce

“Entrepreneurs will have to pass these increases on to their prices. we will enter inflationary cycle, which leads to a reduction in consumption, and hence production. If they don’t, margins and profits will drop, leading to a drop in investment and hiring…,” analyzes a financial expert from the University of Caen.

Oil: $110 per barrel

in barrel of oil also glows. Russia is the second largest oil exporter in the world. With this war in Ukraine, imports are slowing down and the price per barrel is rising. He overcame the symbolic threshold of $110, a record high since 2014, and the annexation of Crimea by Russia. At the gas station, the symbolic bar of 2 euros per liter was exceeded at some Manchoise stations for unleaded 98. It even reached 2160 euros at the Shell motorway service station in Le Gouve.

Here again the prospect of an inflationary period is clear.

Government agencies are asking us to measure the number of companies that could be affected by this conflict and to prioritize issues. We are currently looking at those who traded with Russia, but the influence could be much wider.

Gilles Trey

From the most imported products in the English Channelleading chemicals and nitrogen-containing products at 108 million euros. Trade also influenced, in particular, the rise in gas prices.

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Export blocked

La Cidrerie de la Brique exported to Russia, but the war in Ukraine ended the commercial agreement.
La Cidrerie de la Brique exported to Russia, but the war in Ukraine ended the commercial agreement. (© La Presse de la Manche)

La Manche also exports to Russia. Not a lot, but a few products. With l’exclusion of Russian banks from the Swift platform, Vladimir Putin’s country is cut off from European markets. “This is not our main market,” explains François Calando of Brick cider, in St. Joseph. It represents 2% of our turnover. But today this market is clearly closed. They have no means of payment.” Orders are pending and Russian importers are trying to find solutions.

“The ruble fell sharply. Russians can no longer exchange it for dollars because the currency is now banned for them. They can’t pay anymore! ”, explains Sandy Campart, an expert in finance at the University of Caen.

The channel then lost the market by more than 2 million euros (data for 2021), which is a drop of water from 1,595 million euros of export products. Russia is not among the top ten countries importing Manchois products. La Manche exports mainly to Germany, Brazil and the Netherlands.

But, some sectors of the Normandy economy may still be affected. “We have companies in luxury goods, aeronautics, industrial and agricultural equipment that should be influenced,” says the financial expert. But the consequences will be especially catastrophic for the Russian economy. “The currency has completely depreciated, many companies have suspended their services or refused services, such as Ikea, Boeing, Google…,” emphasizes Sandy Campart. “Hundreds of thousands of jobs are at stake, and the entire Russian economy is in danger of collapse. »

“A real disaster for the Russians! »

Antoine Noel is President of Laboratoire Dielen in Cherbourg. A pharmaceutical laboratory specializing in bioactivity has formed a partnership with Russia.
“We have been developing a partnership with Russia for three years to export a dietary supplement. We needed to register the product with the authorities, create a network. We just made an agreement and sent our first pallet. More pallets were to follow, but my Russian intermediary called us to stop everything.”
With the exclusion of Russian banks from the Swift international payment platform, payments are no longer guaranteed. Transportation of goods became almost impossible. “There are financial implications for us, but above all, the development prospect, which is closing. For them, this is a real disaster. We work with young Russians who studied in European schools. Following Putin’s policy, we feel that they are categorically opposed to what is happening. They are depressed and risk losing everything.”
So, is Russia over for Dilen? “We do not know. The question must be asked ethically, politically. We should also talk about this with our Russian contacts. It is very difficult”.

Wheat: 370 euros per ton

Russia is also the breadbasket of the world. “It’s one of the biggest grain exporters,” says Sandy Campert. Russia and Ukraine produce 80% of sunflower oil in the world. The latter is widely used in many food products.

The price of cereals hit records. A ton of wheat has risen in price by 20% since the beginning of the conflict to 353 euros. Last Wednesday it even rose to more than 370 euros in a session. Never saw ! However, France is also a major producer and exporter of wheat.

Inevitably, for French grain producers, the price per ton will also be higher.

Pascal FereyPresident of the Normandy Chamber of Agriculture

Export interrupted

But the news remains dramatic for many countries. Wheat exports disrupted. The Black Sea is one of the sites for the world grain trade. “400,000 tons of wheat are blocked around Odessa on bulk carriers. All grain costs will rise sharply,” says Pascal Ferey, before analyzing the situation.

For the consumer, a baguette will only cost a few cents! First of all, this should not be an excuse for some to stuff themselves even more!

Gilles Trey, president of CCI Normandie, also wants to remain a bit optimistic. “We have beaten Covid. I think there will be a similar mobilization on this serious issue of the war in Ukraine to provide solutions to companies. »

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