How the Ukraine conflict affects South America’s commodity market

Market shocks give extra edge to oil and wheat producers, but global monetary trends could matter more in the long term

commodity market south america
Wheat producers in Russia’s Smolensk region. Photo: Maksim Safaniuk/Shutterstock

The importance of commodity prices for South American economies has been made abundantly clear over the last decades.

The booming 2000s were largely fuelled by one of the strongest surges that the sector had ever seen, raising the value of some of the region’s main exports, which allowed for higher public spending, more imports, and a general increase in living standards.

But commodities reached their peak between 2008 and 2012. The U.S. financial crisis took oil down first, with agricultural and mining products eventually following and hitting local businesses and governments in the process. Balance sheets shrunk, deficits and debt...

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