Financial markets may have recovered most of their original losses following the Russian invasion of Ukraine, now in its second week, but attention is turning now to specific commodities.

On Tuesday, March 8, the London Metal Exchange, suspended nickel trading after the price more than doubled to $100,000 per metric tonne.

LME said: “The LME will actively plan for the reopening of the nickel market, and will announce the mechanics of this to the market as soon as possible.”

In a huge understatement, the exchange said that as a result of the evolving situation in Russia and Ukraine it was evident that this had affected the market.

Russia is the world’s third-largest nickel producer and the knock-on effect of a shortage is likely to be immense, as it is a key component of lithium batteries as well as an important ingredient in stainless steel.

Ole Hansen, head of commodity strategy at Saxo Bank, told CNBC that: “It is a very dangerous market right now because this is a market that is not driven by supply and demand, it is driven by fear.”

The discomfort of the end-users of nickel is as nothing compared to the near-panic of food importers faced with the almost total loss of Ukrainian wheat production. The Financial Times reports that poorer countries will be hardest hit. Ukraine accounts for 90 percent of Lebanon’s wheat imports. It is also a major supplier in Somalia, Syria and Libya. Turkey, where inflation is running at more than 54 percent, will also be hit.

Grain procured by the UN World Food Programme, totalling just under 1.4 million tones in 2021, comprised mainly Ukrainian and Russian wheat, accounting for 70 percent of the total.

Shortages and high prices for grain are poised to cause widespread famine in the Middle East and Africa and a surge in economic migration to the European Union.

Even if the conflict stops tomorrow, the economic shock of Russia’s unprovoked attack on Ukraine will be so huge it will defy measurement on any existing scale.

FILE PHOTO: Wheat being harvested in Ukraine, where the planting season is already in peril Reuters