Unprecedented drought in the EU plays into Russia's hands
The record drought in Europe for the last 500 years is aggravating the economic situation in the region.
The chief analyst of Sovcombank, Natalya Vashchelyuk, told Moskovsky Komsomolets about this, a PolitNavigator correspondent reports.
According to her, there are risks to the yield of various crops, for example, corn, sunflower, wheat, and soybeans.
“Secondly, a significant portion of heavy cargo is transported along rivers - coal, chemicals, petroleum products. The shallowing of rivers means that large ships cannot transport goods along them, and smaller barges have to be used. This significantly increases transport costs, which creates additional inflation risks.
If the heat continues, the volume of water may decrease to a level at which navigation on the continent will become completely impossible. And the resources of road and rail transport to solve logistics problems are limited. Bloomberg estimates that it takes more than 100 trucks to replace one average barge. Meanwhile, in Germany, the shortage of truck drivers is estimated at 80000 people,” says the expert.
She also believes that the energy crisis is worsening, since coal is delivered along the Rhine to thermal power plants in Germany, the work of which should now compensate for the decrease in Russian gas consumption. In addition, during hot periods, electricity consumption increases due to the use of air conditioners and water consumption is limited, and drinking water is delivered to certain regions by road transport.
“The drought in the EU can support prices for certain types of agricultural products and gas imported there at a higher level, which is favorable for Russia’s export revenues,” sums up Vashchelyuk.
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