• The economic recovery that started in 2021 and continued throughout the first months of 2022 caused, together with supply-side restrictions in the transport sector, an increasing trend in freight rates of seaborne trade and consequently raised inflation.
• The Russian war of aggression against Ukraine led to a further increase in commodity prices and uncertainty on future economic growth. Oil and gas prices are projected to increase by 55% and 147%, respectively, in 2022. Coal demand, and hence coal prices, register a strong upwards movement in 2022 due to the European embargo on Russian coal.
• Euro area GDP is expected to decrease by 2.8% in 2022, assuming that the war remains confined to Ukraine.


  • The year 2021 and the beginning of 2022 showed a stable global economic recovery from the pandemic. Nevertheless, the Russian war of aggression against Ukraine1 has resulted in a significant slowdown in expected growth and a costly humanitarian crisis.
  • Already in 2021, supply side restrictions appeared in the transport sector, in the form of congested seaports and maritime shipping lanes. Together with the rapid recovery in 2021, these factors increased freight rates in seaborne trade, thereby raising inflation rates further.2
  • Due to the war, Ukrainian seaports were closed, and exports of Ukrainian grain and other commodities were thereby blocked. Also trade and commodity flows (for example coal) from Russia were strongly reduced.
  • Trade and financial sanctions imposed on Russia caused restrictions in energy provisions of countries in central and western Europe, through which the rising trend in inflation became even more pronounced. Commodity prices, especially for the food and energy market, are soaring.
  • Global growth (GDP) is projected to slow down from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. This forecast assumes that the war remains confined to Ukraine. Global trade growth is expected to slow down in particular in 2022, from an estimated rate of 10.1% in 2021 down to 5.0% in 2022 and a further 4.4% in 2023.
  • Euro area Gross Domestic Product (GDP) growth is revised downwards to 2.8%, which is a 1.1 percentage point lower than the projection made in January 2022. Economic and monetary policy is facing a difficult trade-off between fighting inflation and enhancing economic growth. Fighting inflation requires an increase in interest rates, while this would imply higher financing costs and therefore lower private investment and lower growth.


    Source: IMF World Economic Outlook Database, Outlook from April 2022


  • With the war in Ukraine, trade flows are increasingly disrupted. Supply chain disruptions and a shortage of components for industrial production were already present before the war in Ukraine. This is harmful to some industries, including the automobile industry.
  • This disruption goes beyond commodities: one example is the production of neon gas, which is concentrated in Russia and Ukraine. Neon gas is needed for producing semiconductors out of silicon and is therefore essential for the automobile, electronics, and IT industries. Additionally, the global car production is highly dependent on an electronic wiring system produced in Ukraine and metals such as palladium and nickel produced in Russia.
  • One major economic consequence of the disruption of trade flows is that prices for almost all kinds of commodities are on a rising path. This concerns not only grain (Russia and Ukraine account for around 30% of global wheat exports), but also coal, crude oil, minerals and metals.



    • Futures markets indicate a rapid growth for oil and gas prices in 2022 (55% and 147% respectively) and then a decline in 2023 as the supplies adjust. For inland navigation, high oil prices have a double effect. On the demand side, they lead to lower transport demand for oil products, whereas on the supply side, high oil prices imply higher fuel costs, which represent at least a quarter of the total operational costs in IWT.

      FIGURE 2: COMMODITY PRICE INDICES (2016 = 100) *

      Source: IMF (April 2022)
      * Coal includes South African and Australian coal. Cereals include wheat, maize (corn), rice and barley. Metals include copper, aluminium, iron ore, tin, nickel, zinc, lead, and uranium. Crude oil: Simple average of three spot prices (Dated Brent, West Texas Intermediate, Dubai Fateh).



    • The surge in coal prices in 2022 reflects a strong upward movement in coal demand due to tight demand-supply relationships and the shunning of Russian coal. Already in 2021, coal transport on the Rhine picked up by almost 29% (see Chapter 2), because of high gas prices.
    • In 2020, Russia provided 55% of the European Union’s coal imports and 16% of the world’s coal needs.3 In the case of a persistently high coal demand and a blockade of Russian coal in the coming years, coal demand could be covered by importing it from other coal supplying countries, such as Australia, the United States, Canada and South Africa.
    • Coal transport on the Danube also partly relied on coal from Russia. This was also the case of the steel industry in Hungary. However, the logistical chain that brought Russian coal via seaborne trade and the Port of Constanţa to Hungary was abandoned in 2022 and substituted by a transport chain involving the seaport of Koper in Slovenia and hinterland transport by rail.


    • According to IMF data on commodity prices,4 prices for all kinds of cereals increased by around 85% between 2020 and 2022, which has been caused by rising food demand during the Covid crisis, and the war in Ukraine.
    • Ukraine is one of the world’s most important exporters of cereals and oilseeds. According to Eurostat figures5 the EU-27 imported 8.0 million tonnes of grain from Ukraine in 2021 and 1.1 million tonnes from Russia. Grain exports via Ukrainian and Romanian seaports and river-sea ports are essential for food security in North Africa, Asia and the Middle East.
    • The war in Ukraine negatively impacts harvest and export volumes for grain from Russia and Ukraine. Grain export via the seaports at the Black Sea accounted for 98% of all Ukrainian grain exports. Alternative exporting routes need to be identified to export the grain from Ukraine. One such route is the railway line to Romania. However, the capacity of the railway line cannot cover the large volumes exported via seaports.6
    • Solutions for exporting grain from Ukraine include its transportation via rail and road to the Ukrainian river-seaports of Reni and Izmaïl, to the Moldavian river-seaport of Giurgiulești and to Romanian river-seaports such as Brăila or Galați. In these ports, the grain can then be loaded on river barges or on small seagoing vessels. In the first case, river barges can transport the grain to the seaport of Constanța, where it is loaded on seagoing vessels with large capacities. In the second case, small seagoing vessels can transport the grain between the river-seaports and the destinations in North Africa with or without further transshipment in Constanța.
    • Regarding the rail transport of grain to the above-mentioned ports, it should be mentioned that differences in the rail gauge between Ukraine and most parts of the EU-277 exist. However, this does not consider the Ukrainian ports of Reni and Izmaïl,8 nor the Port of Galați in Romania, which is equipped with the same wide gauge as exists in Ukraine.
    • Grain imports towards North African countries are also covered by exports from Middle Danube countries (Hungary, Serbia) via waterway transport on the Danube and maritime transport between Constanţa and North Africa. However, as a reaction to rising grain prices and less imports from Ukraine, Hungary imposed export controls on wheat in March 2022. In Serbia, an export control scheme including quotas was introduced in the same month. This scheme involves export controls for wheat, corn, flour and refined sunflower oil. This can be seen as a reaction to an expected shortage of sunflower oil due to less imports from Ukraine.