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Global commodity markets will need to adapt to a lack of supply from Russia and Ukraine, global miner and commodities trader Glencore said in its annual report on Wednesday.

“Over time, global commodity trade flows will need to adapt to some or all of Russian/Ukrainian supply being unavailable, whether due to infrastructure damage, sanctions or ethical concerns,” Glencore said.

Russia’s invasion of Ukraine has caused havoc in commodity markets.

Russia is a key supplier of oil, natural gas, coal, aluminum and nickel, while Ukraine is a major grain producer and exporter. Volatility in all these commodities has spiked, Glencore noted.

Uncertainty over the supply of commodities may push commodity prices and input costs up, Glencore said, causing issues for availability of funding to ensure access to raw materials.

“Depending on the duration of the conflict and the sanctions regime, global commodity flows may change materially from their pre-2022 situation,” Glencore said.

Glencore has said it is reviewing all its business activities in Russia including equity stakes in En+ Group and oil giant Rosneft. Rosneft boss Igor Sechin is under British, European Union and U.S. sanctions.

The fair value of Glencore’s 10.5 per cent stake in En+ was $645-million, while the fair value of its 0.57 per cent stake in Rosneft was $183-million as at close of trading on Feb. 28, the company said.

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