Jakarta, 27 April 2022 - The Russia-Ukrainian conflict that will continue until the second quarter of 2022 could exacerbate the shortage of supply of several commodities and lead to higher prices. Russia is an important exporter of hydrocarbons, fertilizers, and metals, while Russia and Ukraine are major producers of grains such as wheat and corn.
Russia faces difficulties in exporting some of its products due to sanctions, logistical problems, and the reluctance of some trading partners to buy Russian products, while Ukraine has been physically cut off in many ways. The conflict has led to a widespread spike in commodity prices. Prices of some commodities, such as crude oil have soared more than 30% at the beginning of the second quarter of 2022.
ICDX Commodity Exchange assesses that in the second quarter of 2022, commodities such as crude oil and metals such as gold will still experience price volatility, making them attractive to trade. This can be seen from the gold product in ICDX which is the largest contributor to multilateral transaction volume with a contribution of 56.79%. Meanwhile, during the first quarter of 2022, ICDX recorded a total multilateral transaction volume of 240,763 lots, an increase of almost 50% compared to the first quarter of 2021.
"In addition to the ongoing conflict between Russia and Ukraine, conditions in other global markets, namely China's re-locking due to the re-emergence of Covid-19 cases, have also sparked fears of a slowdown in the global economy. The uncertainty in the global economy has made market players tend to shift their investment to safe-haven assets, namely gold products,” explained ICDX Research & Development Girta Yoga.
“Global palm oil prices are influenced by the two largest producers, namely Indonesia and Malaysia. In Malaysia, there is currently a problem with the wages of plantation workers. Meanwhile, the government has imposed a ban on exports of Indonesian palm oil to ensure the availability of oil in Indonesia. Its substitute product, vegetable oil, is also experiencing an upward trend. So that oil will still show a bullish trend,” added Yoga.
Entering the second quarter of 2022, ICDX also listed forex products as one of the largest volume contributors with a contribution of 31.55%. Therefore, to support this growth until April, ICDX has launched eight new forex contracts, namely Until April 2022, ICDX has added eight new forex pairs namely AUDCAD Mini, AUDCHF Mini, USDCNY Micro, GBPJPY Micro, USDSGD Micro, EURAUD Micro, GBPAUD Micro, and NZDCAD Mini.
In post-Eid, what will play a role is the level of community mobility. This will also be affected by the distribution of Covid-19 cases. “Prices will also not be separated from the influence of the price of fuel oil and the cost of transportation of goods. Especially commodities imported from abroad. For commodities such as soybeans and wheat and their derivatives, more than half of the national needs are still imported from other countries. Specifically for wheat and its derivatives, based on data, in 2020, 29.4% of Indonesia's imports came from Ukraine and Russia," explained ICDX Vice President of Research and Development, Isa Djohari.