The topic must remain the same for the moment given the enormous economic, political and (mostly) human impact of the war.
Now, some 6 weeks after the start of this conflict, Putin’s forces have regrouped and are on the cusp of an increased assault in the eastern part of Ukraine, the Donbas region. For the inhabitants of Mariupol, which is an obstacle to Putin’s desired land bridge between Russia and the annexed Crimea, the experience will become ever more harrowing and further gross human rights violations can be expected.
Since the war is clearly not about to end soon, the effects discussed in the previous two MD’s Insights will become ever more severe as can be seen by accelerating increases in the obvious two “F factors” – food and fuel. The inflationary effect thereof is most clearly seen in the Euro countries where inflation is at the highest it has ever been since the introduction of the Euro currency almost two and a half decades ago. This will soon inflate UNIFY product prices and lead to increases in interest rates, which will have to be commenced by the European Central Bank (despite the utterances of ECB President Christine Lagarde in Frankfurt on 17 March 2022), will strengthen the Euro as a result.
Commodity prices continue to keep the Rand strong as the following graph depicts:
This strength takes the Rand to pre-covid pandemic levels BUT, it cannot last. Supply constraints (Unify has manufacturing units in Russia and in Ukraine), Euro inflation and increased interest rates, fuel induced inflation in SA will soon make themselves felt and the Rand will suffer accordingly.
To our partners, it must be repeated once again: make use of the stronger Rand and take up stock whilst it is available to you and fulfil orders sooner rather than later.
Chartered Accountant (SA)
An advocate of the High Court of South Africa