“… absence of payments in roubles
While there’s been continuing hem and haw, back and forth on the part of both Europe and Russia about the former paying for the latter’s natural gas in rubles (discussed here), things appear to be coming to a head. Poland and Bulgaria have seen their gas supplies halted this week, a move that was decried as “yet another attempt by Russia to use gas as an instrument of blackmail”. Whether courtesy of the example of Bulgaria and Poland or as a consequence of other dynamics, the Russians appear to be making headway on their demand to be paid in Rubles. According to a “person close to Russian gas giant Gazprom” (caveat emptor), “four European gas buyers have already paid for supplies in rubles” and “ten European companies have already the accounts at Gazprombank”.
(As an aside, Spanish PPI eclipsed even Germany’s latest eye-watering readings, hitting 46.6%YoY thanks to energy costs, which were up an astounding 134.6%.)
“Nearly four times higher”
Meanwhile, the ongoing food supply chain snafu continues. Rationing is taking hold or appears to be the only option in everything from German gas to flour (thanks partly to the truckers’ strike and diesel price problems mentioned here). Still, problems with cooking oil appear to be growing particularly acute. Stores in the UK have put in place purchasing restrictions. France has loosened food labeling rules in response to shortages, so long as ingredient changes don’t “affect the security of consumers, notably in case of allergies”. And the problem even caught the attention of NPR, who explained that Ukraine “supplies nearly half of the world’s sunflower oil” while one-quarter of the global supply comes from Russia. Adding to the oil woes is the recent protective move by Indonesia, who announced that it “will ban the export of cooking oil raw materials and cooking oil” starting today. While the incumbent government expects revenue and currency ramifications, Indonesia’s President Joko Widodo said, “meeting the people’s basic needs is a more important priority”. The ban could present quite the pickle for those reliant on such exports as the country is, as explained by CNN, “by the far the world’s top producer of palm oil, accounting for 59% of global output last year”.
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