A review of the chain of supply and demand in 2022
The covid pandemic had already disrupted the balance between supply and demand before the Russian invasion made matters worse. In 2022 the focus was more on supply than demand, as there were many hindrances in commodity distribution worldwide. For example, the imposed Ukraine War blocked the long-established trading routes in the Black Sea and resulted in more import/export costs. However, as the governments devised policies, such as increasing interest rates, to control inflation, we can expect a decrease in demand in 2023.
Another contributing factor to less demand in the global market can be China’s zero-tolerance policy towards the Covid pandemic, which has been surging again. China is the biggest consumer of almost all types of commodities, and in case of a lockdown, there will be a significant decrease in demand. Overall, the worst of inflation seems to be behind us, but the balance between supply and demand is yet to be restored to pre-war and pre-pandemic status.
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Source: www.pipsafe.com – A review of the chain of supply and demand in 2022
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