SSRN Id4286716

The Economic Impacts of Russia-Ukraine War Export Disruptions of Grains and Metals *
by
Adam Rose
Zhenhua Chen
Dan Wei
November 22, 2022
*
The authors are, respectively, Senior Research Fellow, Center for Risk and Economic Analysis of Threats and
Emergencies (CREATE), and Research Professor, Sol Price School of Public Policy, University of Southern California
(USC); Associate Professor, City and Regional Planning (CRP), Knowlton School of Architecture, The Ohio State
University (OSU), and External Research Fellow, CREATE; Research Fellow, CREATE, and Research Associate
Professor, Price School, USC. The research presented in this paper was funded by the Center for Accelerating
Operational Efficiency (CAOE) under grant no. 17STQAC000001 from the U.S. Department of Homeland Security.
The views and conclusions contained in this document are those of the authors and should not be interpreted as
necessarily representing the official policies, either expressed or implied, of the U.S. Department of Homeland
Security. The authors gratefully acknowledge the collaboration of Fred Roberts and Drew Tucci in a broader
project analyzing compounding and cascading disasters, and for further comments on earlier version of this paper.
We appreciate the extensive modeling advice of Terrie Walmsley, as well as helpful suggestions by Misak
Avetisyan. The authors would also like to thank Konstantinos Papaefthymiou and Denton Cohen for their research
assistance. However, the authors are solely responsible for any errors or omissions.
Electronic copy available at: https://ssrn.com/abstract=4286716

Abstract
We apply the GTAP multi-country computable general equilibrium (CGE) model to analyze the economic
impacts of the major disruptions of exports of grains and metals from the combatants of the Ukraine
War on their own economies and those of others. The simulation results indicate that these disruptions
affect not only Ukraine and Russia but also generate significant cascading economic impacts both across
other sectors and world regions. Of the two countries, our analysis indicates that export disruptions
from Ukraine, will have the largest impact on its own economy, with a real GDP reduction of over $2.6
billion (or a 1.97% decrease). Other countries/regions, such as Russia, China, Rest of Former Soviet
Union, Rest of Asia, and Africa, are estimated to experience much smaller reductions in GDP, with the
world economy estimated to experience a $2.7 billion loss. In contrast the projected impact of its
export disruptions on Russia’s GDP is only slightly over $300 million, and GDP impacts on the global
economy are only slightly less than $400 million, primarily because Russia’s economy is relatively less
dependent on exports and because of favorable terms of trade effects. This research is an initial step in
a comprehensive assessment of the total impacts of the Russia-Ukraine War with regard to other trade
policies and within the context of the lingering effects of the COVID Pandemic and other current issues
affecting global supply chains.
Key Words: Ukraine War, commodity markets, economic impacts, computable general equilibrium
analysis, supply chains

I. Introduction and Overview
The Russia-Ukraine War is already having and is expected to have significant negative impact on global
markets for major commodities, particularly in terms of grains and metals, in addition to energy
products. The War has forced the closure of all Ukrainian ports until recently and has resulted in the
U.S., EU, and other countries and regions imposing extensive sanctions on Russia.
Supply-chains can transmit these direct impacts into cascading effects. Shortages or delays of a given
good or service lead to ripple effects downstream to all other links. Extensive sectoral
interdependencies across supply-chains within industrialized countries guarantee that these impacts will
affect all facets of an economy, and further interdependencies between countries through international
trade spread these impacts worldwide (see, e.g., Rose et al., 2021, for the case of COVID, and Itakura,
2020, for the case of the U.S.-China Trade War).
In Ukraine, the War has prevented the harvesting of 20 to 30% of its winter crops in 2021, and/or
transporting them to markets. As the conflict continued, farmers’ capacity to plant crops for both the
Spring and Winter planting seasons in 2022 has also been seriously curtailed. It is projected that the
early grain harvest for 2023 could drop by 50% (Polityuk and Evans, 2022). Ukraine is a major player in
global food markets and is the largest exporter of sunflower oil, fourth largest exporter of maize, and
fifth largest exporter of wheat. In 2021, 11.4% of global corn exports and 8.5% of global wheat exports
originated from Ukraine (International Trade Centre, 2022b). Sanctions against Russia add to the supply
chain disruption as Russia is the world’s largest exporter of wheat and second largest exporter of
sunflower oil. In 2021, 13.1% of global wheat exports originated from Russia (International Trade Centre,
2022b). The ongoing conflict leads to a shortage of cooking oil in the world due to suspension of oilseed
crushing operations. Since palm oil prices have tripled in the past two years, there is also a shortage of
this alternative cooking fuel. International food and feed prices are rising by 8 to 22 percent in different
parts of the world. The conflict could especially affect countries in the Middle East and Africa that rely
on food from Ukraine, potentially leading to shortages and civil unrest (Benton et al., 2022; FAO, 2022).
Russia is an important world supplier of nickel, palladium, titanium, aluminum, copper, and uranium.
The trade restrictions are severing key supply lines for these metals, resulting in skyrocketing
commodity prices. This has cascading impacts on European automotive production lines, including
companies making cables and other automotive parts and other products. For example, Russia is a key
supplier to the U.S. of palladium, which is a key component of semiconductors and catalytic converters.
The purpose of this paper is to analyze the impacts of disruption of exports of grains and metals from
Russia and Ukraine on the economy of the U.S. and the world. We apply a multi-country computable
general equilibrium (CGE) model in our analysis. This modeling approach is ideal for the case at hand
because it characterizes an economy as a set of interrelated supply chains. Specifically, we utilize the
GTAP (2022) CGE Modeling System, the most widely used of its kind. We aggregate it to 17
countries/country groups and 44 commodities, with detailed delineation of sub-categories of grains and
metals. “Shocks” to be modeled in the study include output reductions due to the Ukraine War, export
restrictions due to port limitations, and import bans.
A major data source for our analysis is the UN Comtrade, maintained by the United Nations Statistics
Division (UN Statistics Division, 2022). This database provides information on monthly and annual

imports and exports in both physical volumes and dollar values for over 200 countries and areas. The
data are collected from country statistical authorities and are then standardized by the UN Statistics
Division. The trade data are available at 2-, 4-, and 6-digit Harmonized System (HS) codes, including
information on country of origin and destination of the import/export commodities.
This research is the first step in the study of the total impacts of the Russia-Ukraine War, which would
include other types of trade sanctions and the lingering effects of the COVID Pandemic. Also, although
our analysis takes into account various types of “resilience” in the forms of input and import
substitution, still other resilience tactics, including conservation, use of inventories and production
recapture would need to be considered.
II. Estimation of Grains and Metals Export Disruptions
The War between Russia and Ukraine is causing significant impacts on the already stretched global
supply-chains following the COVID-19 pandemic. Although Ukraine and Russia are not major importing
countries, they are the suppliers of many essential commodities such as agricultural products and
metals.
As one of the most important players in the international food market, Ukraine was the largest exporter
of sunflower oil, the fourth largest exporter of barley and corns, and fifth largest exporter of wheat,
accounting for 40%, 11.9%, 13.3%, and 8% of the global export values of these commodities,
respectively, in the 2020 marketing year (United Nations Statistics Division, 2022). Due to strong
demand and bad harvests, wheat is expected to be especially vulnerable to supply shocks this year
(Leiva, 2022), and both the United States and United Nations predict that Ukrainian grain exports will
drop precipitously compared to pre-war years (US DoA, 2022; UN FAO, 2022).
Prior to the war, more than 90% of Ukrainian agricultural exports were shipped from the country’s Black
Sea ports (UN FAO, 2022). Damage, occupation, or blockade of these ports is currently preventing this
commercial activity. Before the recent signing of the Black Sea Treaty, the Ukraine Ministry of
Agriculture stated that about 20 to 25 million tons of grain have been held up in-country, and Ukraine’s
capacity to move these commodities by river barge, rail, and truck, either into Europe or to Baltic Sea
ports, has been severely limited (Hegarty, 2022; Wong and Woods, 2022).
The sanctions against Russia further severed the grain supply-chain, because Russia is the world’s largest
exporter of wheat and third exporter of barley (United Nations Statistics Division, 2022). Table 1
presents the 2020 export values of grain and crop products, as well as sunflower seed oil of Ukraine and
Russia, at 4-digit HS code level. Together, the two countries accounted for about 25% of global exports
of Wheat and Barley, about 15% of Maize, and nearly 60% of Sunflower Seed Oil.
Russia is also the world leading producer and supplier of metals, including iron and steel, nickel,
aluminum, copper. There are concerns about the United States’ access to Russian platinum and other
critical minerals that are used as essential materials in the automotive and aerospace industries. In
2021, Russia was the fourth-largest exporter of unwrought or semi-manufactured platinum and other
precious metals under HS Code 7110 (TradeMap, 2022). Russian platinum and palladium were barred
from U.S. and UK markets by the New York Mercantile Exchange and London Platinum and Palladium
Market, respectively (Reuters 2022a, 2022b; Wallace, 2022). Direct sanctions are not the only concern

with regards to continued trade in these commodities. Russian commodities including critical minerals
are also at risk due to both voluntary divestment by Russian firms and western sanctions limiting Russian
access to international financial institutions (Johnston, 2022). The supply chain for minerals is long and
complex, with raw material made into a product, which becomes part of another product, and so on. As
a result, after a while, it becomes difficult to determine whether sanctions apply, and so tracing the
effect of sanctions is not at all straightforward.
Table 1. Ukraine and Russia Export Values of Grain and Crop Products in 2020
Ukraine Russia Global

Ukraine Russia
HS Percentage Percentage Export
Commodity Export Export
Code of World of World Value
Value (M$) Value (M$)
Total Total (M$)
1001 Wheat and meslin 3,594 8.0% 7,918 17.7% 44,796
1002 Rye 3 0.6% 2 0.4% 449
1003 Barley 878 11.9% 899 12.2% 7,367
1004 Oats 3 0.4% 15 1.6% 907
1005 Maize (corn) 4,885 13.3% 395 1.1% 36,713
1006 Rice 4 0.0% 67 0.3% 25,463
1007 Grain sorghum 21 1.2% 4 0.2% 1,709
Buckwheat, millet and canary
1008 30 2.5% 41 3.4% 1,187
seeds; other cereals
Sun-flower seed, safflower or
1512 cotton-seed oil and their 5,320 40.0% 2,472 18.6% 13,316
fractions
Source: United Nations Statistics Division (2022).
Table 2. Ukraine and Russia Export Values of Metals in 2020
Ukraine Ukraine Russia Russia Global

Export Percentage Export Percentage Export
Value of World Value of World Value
HS Code Commodity (M$) Total (M$) Total (M$)
2601 Iron ores and concentrates 4,239 3.0% 1,978 1.4% 140,618
Platinum, unwrought or in
7110 3 0.0% 7,842 12.3% 63,637
semi-manufactured forms
72 Iron and steel 7,687 2.4% 16,006 5.0% 317,569
74 Copper and articles thereof 86 0.1% 5,647 3.8% 148,571
75 Nickel and articles thereof 3 0.0% 3,024 13.8% 21,939
76 Aluminum and articles thereof 108 0.1% 5,464 3.4% 160,684
78 Lead and articles thereof 25 0.4% 174 2.9% 6,095
79 Zinc and articles thereof 0 0.0% 39 0.3% 14,648
80 Tin; articles thereof 0 0.0% 13 0.3% 4,226
81 Metals; and articles thereof 63 0.4% 709 5.0% 14,312
Source: United Nations Statistics Division (2022).

Table 2 presents the 2020 export values of metals (at 2-digit HS code level, except for unwrought or
semi-manufactured platinum, which is at 4-digit HS code level) from Ukraine and Russia. Exports of Iron
Ores from these two countries are also presented in the table. In 2020, Russia’s exports of platinum,
nickel, and aluminum represented 12.3%, 13.8%, and 3.4% of the total global exports of these
commodities, respectively. Together, the two countries accounted for about 7.5% of global exports of
iron and steel.
In order to analyze the impacts of supply-chain disruptions of grains and metals exported from Ukraine
and Russia to major world regions, detailed data on the trade values of 2020 exports from these two
countries are collected from the United Nations Commodity Trade Statistics Database (United Nations
Statistics Division, 2022). The Database, managed by the UN Statistics Division, contains detailed trade
statistics on both import- and export-side from 1962 to the most recent year reported by the statistical
authorities of about 200 countries or areas, and then standardized by the UN Statistics Division. For
each record, the database contains the information on commodity classification (up to 6-digit HS code),
trade value (in U.S. dollars), weight, reporter country, and partner country.
For this analysis, we collected the export data of Ukraine and Russia at 4-digit HS code level, which
categorizes products into over 1,000 different commodity groups. In 2020, Russia exported $337 billion
of commodities to 194 countries/areas and Ukraine exported $46.7 billion to 199 countries/areas. Next,
according to the regional and sectoral aggregation classifications for the CGE model used for this
analysis, we aggregate the 200 or so countries/areas into the 17 regions and map the over 1,000 4-digit
HS commodities first into the 65 GTAP sectors and then further into the more aggregated 44 sectors
adopted in the CGE model.
We simulate the impacts of export disruption of major grain and metal commodities from Ukraine and
Russia. Specifically, we include all 4-digit level grain and metal commodities for which the value of
exports from the two countries combined represents over 10% of the total global export values. The
one exception is Iron Ore. Although the two countries only account for less than 5% of the global export
market of Iron Ore, the total export value is over $6 billion. Appendix Table A1 presents the list of the
disrupted export commodities included in the simulations. These commodities correspond to the
following GTAP sectors: 1) wht (Wheat); 2) gro (Cereal Grains nec); 3) vol (Vegetable Oils and Fats); 4)
oxt (Minerals nec); 5) i_s (Ferrous Metals); and 6) nfm (Metals nec).
To determine the level and duration of grain and metal export disruptions from Ukraine and Russia in
the Base Case simulation, we collected data on the actual reductions of export from the two countries
since the start of the War until June 2022, impacts of bans and other restrictive measures implemented
by other countries on metal exports from Russia, actual and projected shipments of grain exports from
Black Sea ports since the signing of the Black Sea grain exports deal in late July, and other near-term
projections of grain and metal production and exports for the two countries. In the Base Case
simulation, we assume the export disruptions will last one year. See Appendix B for the details of the
calculations of disruptions of Ukrainian and Russian exports.

Table 3. Export Disruptions of Grain and Metal (for Major 4-digit HS Commodities) from Ukraine by Region ($ millions)
1001 1003 1005 1512 2601 7110 7201 7207 7208 7224 7502
1 Oceania 0.2 * 10.9 *
2 China 0.6 249.8 623.1 401.2 307.9 170.7 180.9 69.3 0.1
3 Japan * 2.7 6.0
4 India 0.1 0.6 0.2 593.9 1.1 3.7 0.3
5 Rest of Asia 777.1 1.9 125.0 68.0 6.9 * 131.3 59.7
6 Canada 1.3 1.3 7.3
7 USA 23.2 4.0 457.1 *
8 Rest of North America 3.1 1.1
9 Latin America 3.1 0.1 7.8 * 159.0 14.7
10 NATO countries (except US/CAN) 180.2 14.1 789.0 704.6 145.3 0.8 114.5 1,129.8 603.4 28.0
11 Rest of Europe 2.3 3.6 41.3 8.6 43.4 13.5 57.9 *
12 Russia * * * 120.1 1.8 0.5
13 Rest of Former Soviet Union 0.6 0.5 8.8 11.3 0.3 * * 2.6 74.7 0.1 *
14 Ukraine
15 Middle East 205.3 107.0 223.8 263.4 * 39.1 204.2 219.1
16 Africa 641.5 89.2 388.8 100.2 8.8 259.1 153.2
17 Rest of World
Total 1,814.0 466.8 2,201.4 2,197.9 523.8 0.8 781.5 2,087.7 1,375.7 30.3 0.5
50.5% 53.2% 45.1% 41.3% 12.4% 29.4% 84.7% 76.0% 86.0% 59.8% 100.0%
*Denotes a value less than $50,000

Table 4. Export Disruptions of Grain and Metal (for Major 4-digit HS Commodities) from Russia by Region ($ millions)
1001 1003 1005 1512 2601 7110 7201 7203 7207 7208 7224 7501 7502
1 Oceania 0.5
2 China 0.9 0.6 * 235.1 176.4 * 10.9 11.8 14.4 1.2 0.1 *
3 Japan * 0.7 4.7 * 0.5 0.1
4 India 138.9 * * * * *
5 Rest of Asia 89.3 0.1 * 53.4 2.5 * 1.4 1.4 83.2 17.4 0.6 *
6 Canada *
7 USA 0.1 3.4 * 19.8 0.6 3.8 0.5
8 Rest of North America 1.5 26.8 3.0 0.4
9 Latin America 5.5 0.1 6.5 3.6 1.6
NATO countries (except
10 US/Can) 148.7 9.2 * 199.0 137.9 1,811.5 241.7 347.3 608.2 659.0 93.6 239.9
11 Rest of Europe 2.9 * 8.9 12.7 * 0.5 0.7 0.2 14.8 * 212.6 131.7
12 Russia
13 Rest of Former Soviet Union 44.0 6.0 * 239.8 0.3 * 1.5 7.4 11.0 26.0 0.1 0.8
14 Ukraine 0.2 0.3 * 9.3 40.5 * * * 0.7 1.6 0.1 0.1
15 Middle East 53.5 85.4 * 45.7 * 0.1 3.7 11.9 1.8
16 Africa 271.2 12.4 * 98.3 10.8 * 0.3 17.1 7.3
17 Rest of World
Total 617.7 113.9 * 1,030.0 395.5 1,811.5 276.4 373.2 781.0 733.7 95.4 212.6 372.5
7.8% 12.7% 0.0% 41.7% 20.0% 23.1% 21.1% 40.3% 16.1% 28.8% 50.2% 20.0% 20.0%
*Denotes a value less than $50,000.

III. CGE Modeling
A. The GTAP Model
The Global Trade Analysis Project (GTAP) model adopted in this assessment consists of 17 regions and
44 economic sectors (GTAP 2022). This modeling system was originally developed by Hertel (1997). It is
a static and multi-regional CGE model that has been widely adopted to evaluate the macroeconomic
impact of trade policies. The model is based on Walras’s general equilibrium theory and has been
extended to provide a realistic representation of economy-wide national activity and international trade
(Mukhopadhyay and Thomassin, 2010). The GTAP model is based on two sets of simultaneous
equations. The first set consists of equations that reflect microeconomic theory responses to the
behaviors of representative economic agents: producers, consumers and government. The second set of
equations reflects the accounting relationships among the agents and the Rest of the World, extending
the linkages to the macroeconomic level. Rose (1995) noted that CGE models have advantages over
other approaches, such as input-output models, because they have behavioral content, reflect the role
of prices and markets, exhibit nonlinearities, and incorporate explicit constraints.
The GTAP 10 database was adopted for the CGE analysis in this paper. The data represents the world
economy, with 2014 being the latest year of reference. The database describes global bilateral trade
patterns, international transport margins, and trade protection matrices that link individual
countries/regions (Aguiar et al., 2019). In this paper, we evaluate the economic impact of export
reductions in two major categories of commodities -- grains and metals -- as a consequence of the
outbreak of the Ukraine-Russia War.
Overall, the GTAP Model enables us to analyze the economic impact measured in real GDP change,
employment change, and the change in economic welfare. The latter is measured in terms of equivalent
variation, reflecting the level of disposable income necessary to attain the new level of aggregate
consumer utility. Hence, the model enables us to evaluate the extent to which the export reductions
from Ukraine and Russia affect major macroeconomic indicators and welfare changes that are likely to
occur in various trade-partner countries/regions.
Our analysis includes the following steps. First, we estimate a Base Case of impacts in terms of real GDP
and economic welfare changes stemming from export reduction shocks applied to Ukraine and Russia
and extending to their corresponding trading partner countries/regions. Second, we conduct two sets of
sensitivity analyses: One set applies to three key substitution parameters, including the factor
substitution (ESUBVA), the Import-domestic (Armington) substitution (ESUBD), and the Import–import
(Armington) substitution (ESUBM). The other applies to the potential of Russia to back out of its
agreement not to block Ukrainian grain exports. Third, we discuss the findings, limitations of the
modeling, and future research directions.
B. Methodology to Simulate Commodity Export Disruptions
There are a number of methods used by CGE modelers to analyze the economic impacts of commodity
trade disruptions. These include the phantom tax, direct commodity output constraints, constraining
flow variables through adjustment of tariff variables, productivity shocks, willingness to pay shock and
margin shocks (Walmsley and Strutt, 2021; Chen and Li, 2021). We chose the Phantom Tax approach

with closure rules that fix capital endowment of the economic disruptions from the War (a type of
“medium-run approach” applicable to simulations that cover only a couple of years). These settings
were deemed as the best for estimating the impacts of constraints on exports. Further considerations
relating to commodity trade, such as tariffs, would likely best be served by some of the other methods.
1. Phantom Tax
Phantom taxes are types of virtual taxes that have the effect of changing behavior or responding to
mandates, such as reducing demand, but collecting no net revenue (Giesecke et al., 2013). “An
indispensable part of the phantom tax modelling is the zero-revenue condition, which makes sure that
revenues from phantom taxes on imports and subsidies to the domestic producers are evened out, i.e.
there are no tax revenues gains/losses from a change in domestic preference margins” (Kutlina-
Dimitrova, 2017; p. 13). The approach is often used to assess the impact of non-tariff barriers and
external shocks (e.g., Dixon et al., 2011).
Dixon and Rimmer (2002) endogenized a phantom tax on the production of fruits and nuts to generate a
price consistent with a 10 percent reduction in demand to match the target reduction in output. In
another application, the phantom tax was adopted to model the effect of both the government’s policy
of land designation, and the associated economic cost measured in terms of the land rent foregone by
the policy impediment to the allocation of land to its most valued use (Giesecke et al., 2013). In addition,
Walmsley et al. (2021) and Rose et al. (2021) also adopted a phantom tax shock to estimate the national
and global impact of COVID-19 due to mandatory business shutdowns. The demand of affected sectors
was reduced by endogenizing the sales tax to mimic a price rise, which, in turn, reduces final demand to
the desired level.
In this paper, the phantom tax shock is used to model the impact of the War on supply-chain disruption
by restricting domestic export volume in Ukraine and Russia based on actual and projected trade
statistics, while maintaining zero profit and zero government revenue conditions.
A possible disadvantage of this approach is the potential issue of double-counting when applying the
phantom tax (as well as some other methods below, such as the trade margin approach.) This pertains
to a situation where two or more commodities have their production, exports, or imports constrained
and one of the commodities is a major constituent element in the supply-chain of the other. Solutions
to this problem also require trial and error adjustments (e.g., Walmsley et al., 2021). However, the
double-counting issue is not applicable to the current study, where we are constraining trade in only five
commodities that have very little interaction with each other directly or indirectly.
We use a simple version of the phantom tax in applying the GTAP CGE Model. This is to reduce exports
(qxs) by a given percent, thereby transforming exports from an endogenous variable to an exogenous
variable and then “swapping out” an export tax (txs), which was previously exogenous to become
endogenous. This approach does not require trial and error to adjust the commodity price to obtain the
necessary reduction. However, this facile approach is not likely to be applicable to all of the various
trade disruptions that would have to be modeled in a complete compound/cascading analysis of the
Russia-Ukraine War.

2. Shocks and Closure Rule Settings
The closure rule of the CGE model refers to the specifications of variables to be exogenized so that the
number of endogenous variables equals the number of equations. Table 5 summarizes the settings of
shocks and closure rules for the scenarios modeled in this paper.
Given that capital is assumed to be immobile, an additional swap statement can be applied to exogenize
the capital input while endogenizing the price of capital (which is represented by the tf variable, as
shown in Table 5). This closure method is used instead of the SLUG mechanisms in the GTAP model,
because we sought the more realistic assumption of capital being immobile (SLUG allows some mobility
through the setting of the parameter ETRAE). Note that in order to apply the swap statement to
constrain capital mobility for all sectors, we fix demand for the endowment for all sectors except one. 1
To ensure we do not inadvertently subsidize capital, we also assume that the weighted average of these
changes in the phantom taxes are zero. One caveat of this approach is that the specification does not
work well when combined with the unemployment of capital because all the unemployment will be
forced into that last sector, which may lead to a biased impact estimation outcome. Hence, we have
adopted the full employment of capital closure rule. 2 In all three scenarios, the export disruption shock
is implemented through the qxs(Trad_Comm, ORG, DEST) variable, which represents export sales of
commodity i from the region/country of origin to the region/country of destination, after swapping it
with the txs(Trad_Comm, ORG, DEST) variable that represents the specific change in subsidy on exports.
The latter is considered a phantom export tax, since it is determined endogenously, and rents are
assumed to be paid by the exporter (see Table 5).
1
The final sector is fixed automatically because of the constraint that total demand for an endowment across all
sectors must equal total supply.
2
This still allows for unemployment of other factor endowments, such as labor.

Table 5. Shocks and Closure Rule Settings for the CGE Simulation
Closure and Default exogenous variables Swapped variable Variable in model used Description Binary CET between
factor (originally for swap (originally parameter for sectors for
mobility endogenous, becomes exogenous, becomes endowment potentially
exogenous) endogenous) mobility sluggish primary
(SLUG) factors (ETRAE)
Full pop • qxs(Trad_Comm, •txs(Trad_Comm, ORG, Prod_Comm represents Capital and Default setting.
employment psaveslack pfactwld ORG, DEST), DEST), representing the five commodity types: labor are (Parameters of
closure rule profitslack incomeslack endwslack representing export dest. Specific change in GrainsCops, Extaction, treated as capital and labor
with limited cgdslack tradslack sales of commodity i subsidy on exports of I VegOilFats, MetalProd, mobile, while are set as zero;
capital ams atm atf ats atd from region ORG to from r to s (Phantom tax and FerrousMetal); parameters of
land and
mobility aosec aoreg avasec avareg region DEST on export) Regions of factor use land and natural
natural
afcom afsec afreg afecom afesec include the other 16 resources are set
afereg •qfe(“Capital”, •tf(“Capital”,Prod_Com regions specified in the resources are as -1 and -0.001,
aoall afall afeall Prod,_Comm, Reg), m,Reg), representing tax model. sluggish. respectively.)
au dppriv dpgov dpsave representing demand on primary factor
to tp tm tms tx txs for capital for use in (capital) used by j in
qo(ENDW_COMM,REG) industry j in region r region r
atall avaall tf tfd tfm tgd tpd tgm tpm;
• tfav(“Capital”, Reg) •tfendw(“Capital”,,Reg)
new variable – new variable added to
representing the adjust tax rates to keep
average tax average equal to zero.
10

VI. CGE Modeling Results
A. Base Case
The Base Case CGE simulations were conducted for export reduction scenarios in Ukraine and Russia
based on the data in Section III. To eliminate the influence of price inflation, the impact results are
reported in terms of GDP Quantity Change. In addition, this is the more important macroeconomic
indicator of the change in well-being, given that it represents the real value of a market basket of goods.
As shown in Table 6, in the case of the export reduction of grain and metal products from Ukraine, its
economy is estimated to experience the most negative impacts, with a real GDP (GDP Quantity)
reduction of $2.6 billion, or 1.97%, in part because of its relatively large trade dependency. Other
countries/regions are estimated to also experience relatively significant reductions in GDP: Russia
(-0.013) and Rest of Asia (-0.01). Conversely, the impacts on countries/regions, such as India, Rest of
NATO (except the U.S. and Canada) are estimated to experience slightly positive impacts on the order of
0.1%, likely due to the increased production of other goods and services in their country due to their
substituting domestic production for Ukrainian imports and the inherent substitutions among factor
inputs as commodity prices change. Note that the results could be optimistic given that we have not
made any adjustments in the import trade (Armington) elasticities of substitution, which could be lower
given the medium-run nature of our analysis (see the sensitivity tests below.
The Russian economy, in contrast, suffers only a negative GDP impact of $300 million, or 0.1%, from the
disruption of its grain and metal exports. The simulation also projects relatively small reductions in GDP
in its major trading partners China and Rest of Asia. The simulation also projects a very small increase in
GDP for Ukraine, Latin America, Oceana and Japan, partly due to trade substitution effects. The overall
negative impact on global GDP is projected to be only $397 million. There are two major reasons why
the global impact of Russian export disruptions is only 20% of the outcome for Ukrainian export
reductions. First, although the total value of exports from Russia is nearly three times of that from
Ukraine, the percentage of export disruption in Ukraine as a percent of the scale of its economy is nearly
six times as large as that of Russia. Second, the difference of impacts also reflects that the global
economy has a different dependence of grain and metal products from Russia and Ukraine. For instance,
the reduction of grain and metal products from Ukraine has a more substantial negative consequence
on other trade partner countries/regions, such as the Rest of Asia, Africa, Oceania and the Middle East.
The combined GDP impacts of the simulated export disruptions in the two countries are presented in
column set 3 of Table 6. The total $3.2 billion decrease in global GDP is slightly larger (nearly $100
million) than the sum of separate impacts discussed above, indicating some minor negative interaction
effects, or synergies, of the combined trade disruptions. Interestingly, however, the results for the
simultaneous simulation are actually slightly lower for Ukraine and Russia than the sum of the two
separate effects.
The economic welfare effects of the simulations are presented in Table 7, in which they are decomposed
into aspects. The Allocative Efficiency effects track almost perfectly with the GDP impacts on a country-
by-county basis and for the global economy as a whole for the individual Ukraine and Russia simulations,
as well for the simulation simulations. However, the standard Terms of Trade (TOT) effect are especially
strong and of the opposite sign for Russia, resulting in an estimate of a positive overall Equivalent
Variation (EV) effect of an increase of $677 million, or more than 0.03%. This outcome is similar to
11

impacts on Ukraine for the Russian only simulation and stronger in relative but not absolute terms.
Similarly, the TOT effects further reinforce the basic Allocative Efficiency effects negatively in both
directions in some of its major trading partners, such as China and OECD countries. The Investment-
Savings TOT effects are relatively small for all countries/regions except for Russia and China. Note that
the totality of the three EV components in relation to their impact on the global economy is very small
because they cancel each other out on the world import/export stage.
The overall TOT effects have little influence on the bottom-line impacts of the Ukrainian economy. The
Allocative Efficiency Effect is almost identical to that of the GDP impact, and the other two components
have only a minimally positive offsetting effect in the Ukraine-only simulation, but a more significant
effect in the simultaneous simulation (this is also the outcome for the total EV Russian EV impacts).
As to price effects, these are fairly minimal. For the combined Russia-Ukraine case, the largest increases
in world commodity prices are projected to take place for Grain Crops in the Middle East (3.2%) and
Africa (2.8%). Africa is also projected to incur the largest metal extraction import price increase (0.9%).
The largest import price increases for Vegetable Oils are projected for the Rest of the FSU (4.4%) and
India (1.2%). RFSU is also projected to incur the largest Ferrous Metal import price increase (1.4%), and
NATO countries the largest Metal Products import price increase (0.1%).
Table 6. Real GDP Impacts of Grains and Metal Export Reductions from the Russia-Ukraine War
Export Reduction from Export Reduction from Export Reduction from

Russia Ukraine both Russia and Ukraine
Region quantity percent quantity percent quantity percent
change change change change change change
USA 0 0.0000 18 0.0001 16 0.0001
Rest of North America 12 0.0009 1 0.0001 14 0.0010
China -95 -0.0009 32 0.0003 -81 -0.0008
Japan 29 0.0006 61 0.0013 86 0.0019
India 0 0.0000 213 0.0104 209 0.0102
Rest of Asia -52 -0.0010 -487 -0.0096 -567 -0.0111
Canada -7 -0.0004 17 0.0010 13 0.0007
Latin America 57 0.0011 79 0.0015 140 0.0027
Oceania 56 0.0033 63 0.0037 126 0.0074
NATO (except US, Canada) -76 -0.0004 236 0.0013 126 0.0007
Rest of Europe 6 0.0002 54 0.0022 59 0.0024
Russia -300 -0.0148 -261 -0.0128 -559 -0.0275
RFSU -19 -0.0034 -69 -0.0129 -87 -0.0162
Ukraine 16 0.0124 -2602 -1.9745 -2596 -1.9697
Mid-East -16 -0.0006 -12 -0.0004 -31 -0.0011
Africa -7 -0.0003 -55 -0.0022 -67 -0.0027
Rest of World 0 0.0000 0 0.0000 0 0.0060
Total -397 -0.0005 -2712 -0.0035 -3200 -0.0041
12

Table 7. Economic Welfare Impacts of Grain and Metal Export Reductions from the Russia-Ukraine War (in millions of 2014 U.S. dollars)
Country/ Export Reduction from Russia Export Reduction from Ukraine Export Reduction from both countries
Regions Alloc. Effici. TOT IS_TOT Total_EV Alloc. Effici. TOT IS_TOT Total_EV Alloc. Effici. TOT IS_TOT Total_EV
USA 0.0 108.4 -39.0 69.3 18.7 502.2 91.2 612.1 16.0 646.5 46.2 708.7
Rest NAmerica 11.8 106.5 6.2 124.5 1.3 8.3 8.4 17.9 13.5 118.6 14.4 146.6
China -95.3 -635.8 -172.6 -903.7 32.0 -119.7 -263.1 -350.7 -81.0 -837.1 -441.3 -1359.3
Japan 28.7 323.2 -13.4 338.5 60.5 322.9 -10.2 373.2 86.2 637.1 -24.6 698.7
India 0.2 -18.4 -13.2 -31.4 213.3 213.9 36.9 464.0 208.7 185.3 21.7 415.8
RAsia -52.2 -199.1 -50.0 -301.2 -486.4 -176.4 -57.5 -720.3 -566.7 -419.1 -109.1 -1094.8
Canada -6.7 -55.4 -6.4 -68.5 17.0 73.6 10.4 101.0 13.1 38.6 4.8 56.5
Latin America 56.6 435.2 9.2 501.0 78.6 396.6 31.8 507.0 139.7 882.3 42.5 1064.5
Oceania 56.2 273.7 -15.2 314.7 63.0 238.5 -15.3 286.3 126.0 552.7 -31.4 647.3
NATO -76.5 -459.6 -66.7 -602.8 236.7 352.6 -53.4 536.0 126.8 -192.8 -125.4 -191.4
Rest of Europe 5.5 -18.8 -13.9 -27.2 53.9 132.3 -23.9 162.4 58.8 113.1 -37.2 134.8
Russia -300.1 559.2 417.5 676.7 -260.9 -136.4 75.4 -321.9 -559.2 449.5 529.3 419.5
RFSU -18.6 -26.0 -10.9 -55.4 -69.4 54.0 -19.6 -34.9 -87.1 -37.7 -32.5 -157.3
Ukraine 16.3 113.3 1.7 131.3 -2607.4 124.0 231.7 -2251.7 -2604.3 467.2 215.4 -1921.6
MidEast -16.1 -333.9 -26.4 -376.4 -12.0 -1267.0 -33.7 -1312.6 -31.3 -1661.7 -61.5 -1754.5
Africa -7.1 -172.2 -6.5 -185.8 -54.5 -710.8 4.0 -761.3 -67.0 -922.3 -2.5 -991.8
Rest of World 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total -397.4 0.4 0.5 -396.5 -2715.5 8.8 13.1 -2693.6 -3207.6 20.4 8.9 -3178.3
13

10
-5
Percent Change
-10
-15
-20
-25
-30
GrainsCrops FerrousMetal MetalProd
-35
-40
Figure 1. Cascading Impacts of Gross Output Quantity Change on Russia and Its Trading Partners due
to Grain and Metal Export Reductions from Russia
0
Percent Change
-1
-2
-3
-4
-5
Figure 2. Cascading Impacts of Gross Output Quantity Change on Russian Sectors due to Grain and
Metal Export Reductions from Russia
14

B. Sensitivity Tests
We conducted three groups of sensitivity analysis with respect to variations in three parameters in the
GTAP Model: Armington elasticities of substitution between domestic and imported commodities
(ESUBD), elasticities of substitution between primary factors in production (ESUBVA), and the CET
transformation parameter (ETRAE) between uses for sluggish primary factors (see Table 8). The Base
Case simulation was based on the original parameters provided by the GTAP database, whereas the
sensitivity analysis examines the variations in percent change of the Quantity GDP (QGDP) impacts with
the same level of shocks for each scenario, but varied by adjusting the parameters for each sector down
and up by 50%, respectively. For instance, the value of ESUBD for metal manufacturing varied in the
range from 1.8165 (a 50% decrease) to 5.4495 (a 50% increase). The sensitivity analyses for the ESUBD,
ESUBVA and ETRAE parameters were executed 88 times, 90 times and 10 times, respectively. Table 6
summarizes the mean, standard deviation and confidence interval of the QGDP impacts based on all the
simulations in each sensitivity analysis.
The results show that the mean estimates of GDP impacts for each country for each sensitivity test are
generally consistent with the Base Case simulations. However, the results appear to be more sensitive to
the variations of the Armington elasticities and the CES elasticities of factor input substitution than
ETRAE parameters. In addition, the results suggest that the variations of GDP impacts on trading
partners are less sensitive to the changes in elasticity parameters than the two countries being directly
shocked.
Note also that the sensitivity tests that call for an increase in the two types of substitution elasticities
can represent the type of resilience in terms of increased ability to find alternative suppliers (Rose and
Liao, 2005; Wei et al., 2020). However, a 50% improvement in these elasticities only results in a
decrease in negative impacts by less than 20%.
On October 29 of 2022, the Russian government announced its intent to suspend the Black Sea Grain
Export deal for an indefinite period, citing a drone attack at its naval base (Polityuk and Nichols, 2022).
Although after four days, Russia rejoined the deal after Ukraine agreed not to use the Black Sea corridor
for military operations against Russia, given the volatility of the situation, we have run a sensitivity
analysis to simulate the impacts of a scenario where the Black Sea Treaty is suspended for the last four
months of the one-year simulation period. The grain export disruptions from Russia and the metal
export disruptions from both countries remain the same as in the Base Case.
The results, presented in Table 9, indicate that resumption of the grain export disruption from Ukraine
would increase the negative impacts on its GDP by about 20%, and have a slightly greater impact than
that on the World Economy. The results indicate, however, that the impact would be rather minute for
the Russian economy, indicating that Russia has little to lose economically from breaking the agreement.
15

Table 8. Sensitivity Analysis of Key Parameters
Sensitivity analysis of the elasticities of Armington CES (ESUBD) for domestic /imported allocation
Rest of N. Rest of Latin Rest of Rest of
qgdp(%) USA America China Japan India Asia Canada America Oceania NATO Europe Russia RFSU Ukraine Mid-East Africa World
Base Case 0.0001 0.001 -0.0008 0.0019 0.0102 -0.0111 0.0007 0.0027 0.0074 0.0007 0.0024 -0.0275 -0.0162 -1.9697 -0.0011 -0.0027 0.0033
Mean 0.0001 0.0011 -0.0008 0.0019 0.0102 -0.0112 0.0008 0.0028 0.0076 0.0006 0.0025 -0.0275 -0.0161 -1.9873 -0.0012 -0.0028 0.0033
S.D. 0 0.0002 0.0002 0.0002 0.0003 0.0002 0.0003 0.0002 0.0007 0.0004 0.0002 0.0011 0.0009 0.0802 0.0003 0.0004 0.0002
CI_low 0.0001 0.0002 -0.0017 0.0010 0.0089 -0.0121 -0.0005 0.0019 0.0045 -0.0012 0.0016 -0.0324 -0.0201 -2.3460 -0.0025 -0.0046 0.0024
CI_High 0.0001 0.0020 0.0001 0.0028 0.0115 -0.0103 0.0021 0.0037 0.0107 0.0024 0.0034 -0.0226 -0.0121 -1.6286 0.0001 -0.0010 0.0042
Sensitivity analysis of the CES elasticities (ESUBVA) between primary factors in production
Base Case 0.0001 0.001 -0.0008 0.0019 0.0102 -0.0111 0.0007 0.0027 0.0074 0.0007 0.0024 -0.0275 -0.0162 -1.9697 -0.0011 -0.0027 0.0033
Mean 0.0001 0.001 -0.0008 0.0019 0.0102 -0.0112 0.0008 0.0028 0.0075 0.0007 0.0024 -0.0276 -0.0161 -1.978 -0.0012 -0.0027 0.0033
S.D. 0 0.0001 0.0002 0.0001 0.0002 0.0002 0.0003 0.0002 0.001 0.0001 0.0001 0.0008 0.0003 0.0479 0.0001 0.0002 0.0001
CI_low 0.0001 0.0006 -0.0017 0.0015 0.0093 -0.0121 -0.0005 0.0019 0.0030 0.0003 0.0020 -0.0312 -0.0174 -2.1922 -0.0016 -0.0036 0.0029
CI_High 0.0001 0.0014 0.0001 0.0023 0.0111 -0.0103 0.0021 0.0037 0.0120 0.0011 0.0028 -0.0240 -0.0148 -1.7638 -0.0008 -0.0018 0.0037
CET transformation parameter (ETRAE) between uses for a sluggish primary factor
Base Case 0.0001 0.001 -0.0008 0.0019 0.0102 -0.0111 0.0007 0.0027 0.0074 0.0007 0.0024 -0.0275 -0.0162 -1.9697 -0.0011 -0.0027 0.0033
Mean 0.0001 0.001 -0.0008 0.0019 0.0102 -0.0111 0.0007 0.0027 0.0074 0.0007 0.0024 -0.0275 -0.0162 -1.9711 -0.0011 -0.0027 0.0033
S.D. 0 0 0 0 0 0.0001 0 0 0 0 0 0 0 0.0091 0 0 0
CI_low 0.0001 0.0010 -0.0008 0.0019 0.0102 -0.0115 0.0007 0.0027 0.0074 0.0007 0.0024 -0.0275 -0.0162 -2.0118 -0.0011 -0.0027 0.0033
CI_High 0.0001 0.0010 -0.0008 0.0019 0.0102 -0.0107 0.0007 0.0027 0.0074 0.0007 0.0024 -0.0275 -0.0162 -1.9304 -0.0011 -0.0027 0.0033
16

Table 9. Sensitivity Analysis Results of GDP Impacts for Continued Cessation of Ukrainian Grain
Exports
Export Reduction from Export Reduction from Export Reduction from
Scenario Russia Ukraine both Russia and Ukraine
quantity percent quantity percent quantity percent
Region change change change change change change
USA 0 0.0000 12 0.0000 10 0.0000
Rest of NAmerica 11.75 0.0009 0.13 0.0000 12 0.0000
China -95 -0.0009 11 0.0000 -104 0.0000
Japan 28.5 0.0006 55 0.0000 78.5 0.0000
India 0.13 0.0000 260.37 0.0100 206.5 0.0100
Rest of Asia -52 -0.0010 -611.5 -0.0100 -700 -0.0100
Canada -6.75 -0.0004 22.37 0.0000 19.63 0.0000
Latin America 56.5 0.0011 85.5 0.0000 141 0.0000
Oceania 56.25 0.0033 67.63 0.0000 131.63 0.0100
NATO -76 -0.0004 226 0.0000 108 0.0000
Rest of Europe 5.5 0.0002 50.25 0.0000 54.5 0.0000
Russia -300.13 -0.0148 -277.25 -0.0100 -567.13 -0.0300
RFSU -18.56 -0.0034 -76.31 -0.0100 -92.38 -0.0200
Ukraine 16.3 0.0124 -3110.3 -2.3600 -3006.72 -2.2800
MidEast -16 -0.0006 -14.5 0.0000 -34.25 0.0000
Africa -7 -0.0003 -67 0.0000 -78 0.0000
Rest of World 0 0.0000 0 0.0000 0.01 0.0000
Total -396.51 -0.0005 -3366.61 -0.0043 -3820.71 -0.0049
Differences of GDP Impacts (by countries/regions) between the Scenario after Adjustment for
Continued Cessation of Grain Exports and before the Adjustment
quantity percent quantity percent quantity percent
Region change change change change change change
USA 0.00 0.0000 -6.00 -0.0001 -6.00 -0.0001
Rest of NAmerica 0.00 0.0000 -1.12 -0.0001 -1.50 -0.0010
China 0.00 0.0000 -21.00 -0.0003 -23.00 0.0008
Japan 0.00 0.0000 -5.50 -0.0013 -7.50 -0.0019
India 0.00 0.0000 47.12 -0.0004 -2.25 -0.0002
Rest of Asia 0.00 0.0000 -125.00 -0.0004 -133.50 0.0011
Canada 0.00 0.0000 5.37 -0.0010 6.50 -0.0007
LatinAmerica 0.00 0.0000 7.00 -0.0015 1.50 -0.0027
Oceania 0.00 0.0000 4.63 -0.0037 5.63 0.0026
NATO 0.00 0.0000 -10.00 -0.0013 -18.00 -0.0007
Rest of Europe 0.00 0.0000 -3.75 -0.0022 -4.25 -0.0024
Russia 0.00 0.0000 -16.37 0.0028 -8.01 -0.0025
RFSU 0.00 0.0000 -6.93 0.0029 -5.32 -0.0038
Ukraine 0.00 0.0000 -507.85 -0.3855 -410.61 -0.3103
MidEast 0.00 0.0000 -2.50 0.0004 -3.00 0.0011
Africa 0.00 0.0000 -12.50 0.0022 -11.00 0.0027
Rest of World 0.00 0.0000 0.00 0.0000 0.00 -0.0060
Total 0.00 0.0000 -654.40 -0.0008 -620.31 -0.0008
17

V. Discussion
A. Comparison to Other Literature
There is little literature to which to compare our results. Ben Hassen and El Bilali (2022) focus on the
prospects of food shortages for the first four months of the war in the Middle East. Their analysis is
basically partial equilibrium, and includes fertilizer production as well as grains. In contrast to their
concerns about the urgency of the situation, our findings indicate relatively slight overall (general
equilibrium) impacts of Ukrainian and Russian grain export disruptions on the Middle East, in part
because imports from other countries and regions offset grain exports to that region. Simola (2022) also
used a partial equilibrium approach to find that Russia’s trade in foodstuffs decreased in the first 4
months of the War, but its export revenues increased due to increases in commodity prices and the shift
of exports to markets where it was not subject to trade sanctions. 3 Umar et al. (2022) is the single study
that has assessed the impacts on metals. They applied OLS regression to estimate the impacts of the
War on financial and commodity markets, finding that the prices of platinum, palladium, and copper
declined by less than 3% during the first 27 days of the war, while the prices of gold, zinc and other
metals increased by less than 3%. Our findings of commodity price increases are basically consistent
with these estimates.
As to comparability of data sources with our study, Hassen and Bilali (2022), as well as Benton et al.
(2022), both used as a primary data source a rapid assessment report by United Nations Conference on
Trade and Development (UNCTAD, 2022), which is based on the same data source, the UN Comtrade
Database, as we use in our study. Jagtap et al. (2022) performed a qualitative analysis of the War on the
global food supply chains from six key areas. The authors first collected pre-war data on grain export
from Ukraine from FAOSTAT (a food and agriculture dataset maintained by the Food and Agriculture
Organization of the United Nations) supplemented by a large-scale literature review and syntheses,
using methods such as customized Google search and information collection from news reports,
targeted websites, and peer-reviewed articles. Because Russia ceased the publication of its trade
statistics after the start of the War, Simola (2022) applied the method of mirror statistics that relies on
the trade data released by Russia’s major trading partners since 2015 to estimate the recent trends of
Russia’s foreign trade flows. Primary data sources the author uses include Macrobond, Comtrade and
Eurostat. Since this approach requires the collection of data from individual trading partner countries of
Russia, the estimations are primarily conducted at a very aggregated export level and for a limited
number of major markets.
B. Limitations of the Analysis
We acknowledge some limitations of our analysis. First, we have used a CGE modeling approach, which
is generally best suited for long-run analyses. I. However, our analysis has provided reasonable results
for the impacts of short-run shocks because of the way we have specified some of our closure rules and
3
Some other studies have addressed impacts of the grain disruptions from either or both Ukraine and Russia with similar partial
equilibrium simulation results, including Benton et al. (2022). Jagtap et al. (2022 used a meta-analysis approach, and Sokhanvar,
and Bouri (2022) applied an autoregressive approach to analyze the exchange rates for 2 sets of country group: EU/Canada and
Canada/Japan. Ozili (2022) applied a simple correlation analysis to examine prices and business performance of major Ukrainian
and Russian Trade partners.
18

assumptions regarding limiting factor mobility. Still our findings should be viewed as lower bounds,
because we have not explicitly factored in supply-chain bottlenecks that have arisen as a result of the
War and their interactions with bottleneck conditions related to the lingering effects of COVID. We have
also not included interactive effects with other types of export instructions, especially those associated
with energy and have not incorporated the effects of various types of trade sanctions as a response to
the War.
Second, we have taken resilience into account only to a limited extent. We have not expressly factored
in the role of inventories/stockpiles, though their influence is limited in an analysis of a year’s length.
We have, however, performed sensitivity analyses on various substitution parameters, such as
Armington elasticities, which would reflect the heightened adjustments with respect to alternate
suppliers.
Third, our results also rely on the elasticities in the GTAP database, which were taken from the more
general literature and are not necessarily country-specific. However, will know better substitution
elasticities are available.
VI. Conclusion
This paper contributes to the understanding of the macroeconomic impacts stemming from supply-
chain disruptions of the Russia-Ukraine War. Using the GTAP multi-regional computable general
equilibrium model, we demonstrate that this event generates significant cascading economic impacts
both across sectors and regions of the world.
In the given scenarios of Ukrainian export shocks, for example, our analysis estimates that the Ukrainian
economy would experience the most negative impacts, with a real GDP reduction of about $2.6 billion,
or about 2%, for a projected one-year period of the War. In addition, the analysis estimates that other
countries/regions, such as Russia and Rest of Asia, would experience relatively significant reductions in
GDP through supply-chain disruptions. In contrast, some other countries/ regions, such as Rest of NATO
and India, would experience economic gains by providing commodities to fill the gap of Ukrainian
exports.
On the other hand, the disruption of Russian grain and metal exports has a relatively small impact on its
GDP, on the order of only $300 million, or only about 0.1%. The main reason for the difference between
the two countries is primarily due to Russia's much lower trade dependency.
Interestingly, the economic welfare impacts, as measured by equivalent variation, on Russia's are
positive because of the strong influence of terms of trade effects. On the other hand, they are negative
for Ukraine, with the EV impacts almost as large as the GDP impacts, because the terms of trade effects
are relatively small.
We also conducted two types of sensitivity analysis. The first indicated that the sudden breaking of the
agreement to allow Ukrainian grain exports through the Black Sea ports would increase negative
impacts on its GDP by nearly 20%, while having an imperceptible impact on the Russian economy. We
also performed sensitivity tests of key substitution parameters affecting this issue, such as the factor
19

substitution (ESUBVA), the Import-domestic (Armington) substitution (ESUBD), and the Import–import
(Armington) substitution (ESUBM). The results indicated that our findings are generally robust.
Overall, this paper is intended as a start in the evaluation of various economic disruptions of the Russia-
Ukraine War and, eventually the effect of other considerations that make this a compound event, such
as the on-going effects of the COVID pandemic and the potential disruptions from increased cyber-
attacks from Russian sources. Our analysis is intended to provide valuable insights into policies and
strategies to reduce the negative impacts of the disruption of the War on individual countries in the
global economy. Work is underway to develop a more comprehensive model of compounding and
cascading supply-chain disruptions (see Egan et al., 2022).
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26

Appendix Table A1. List of Disrupted Grain and Metal Commodities included in the Analysis
HS Code Commodity GTAP Sector CGE Sector

1001 Wheat and meslin WHT 2. Grains and Crops
1003 Barley GRO 2. Grains and Crops
1005 Maize (corn) GRO 2. Grains and Crops
Sun-flower seed, safflower or cotton-
1512 VOL 15. Vegetable Oils and Fats
seed oil and their fractions
2601 iron ores and concentrates oxt 13. Minerals nec
Platinum, unwrought or in semi- 23. Metals and Metal
7110 NFM
manufactured forms Products
Pig iron and spiegeleisen in pigs, blocks or
7201 I_S 24. Ferrous Metals
other primary forms
7203 Spongy ferrous products I_S 24. Ferrous Metals
Semifinished products of iron or nonalloy
7207 I_S 24. Ferrous Metals
steel
7208 Fat-rolled iron or nonalloy steel products I_S 24. Ferrous Metals
Alloy steel (other than stainless) in ingots,
7224 other primary forms and semifinished I_S 24. Ferrous Metals
products
Nickel mattes, nickel oxide sinters and
23. Metals and Metal
7501 other intermediate products of nickel NFM
Products
metallurgy
23. Metals and Metal
7502 Nickel, unwrought NFM
Products
27

Appendix B. Disruptions of Ukraine and Russia Export of Grains and Metal
In this appendix, we present detailed methods and results of our estimation on the export disruptions of
grains and metal from Ukraine and Russia because of the War. In the Base Case analysis, we assume
that the export disruptions will last one year.
A. For disruptions of Ukraine exports, the following factors are taken into consideration:
Grain exports:
- Monthly grain exports (in dollar values) from Ukraine at 4-digit HS code level from February to
May are collected from UN Comtrade (see Appendix Tables B1 and B2). Compared to the pre-
war level (in February 2022), the average monthly grain export reduction is about 70% between
March and May across the major types of grain products we included in the analysis, ranging
from about 57% for Sun-flower Seed Oil to over 90% for Barley. These percentage reduction
levels are applied for the time period from the start of the Russia-Ukraine War to end of June.
- In July, Ukraine exports of major types of grains and oilseed oil rose 22.7% compared to the
levels in June (Polityuk, 2022a).
- A landmark agreement was signed on July 22 to allow for the reopening of the Black Sea ports.
The deal is expected to greatly help clear the over 20 million grains and other agriculture
products that have been stuck in the ports and storage since the start of the War. The
optimistic estimate is that the 20 to 22 million tons of backlog grains can be exported within 4 to
5 months (AP, 22 July 2022; UNIC Ankara, 22 July 2022), if the goal to reach about 5 million tons
of grain shipments per month (close to the pre-war maritime grain export capacity) can be
achieved soon. In Appendix Table B3, we collected data on the actual shipments of grain and
other agricultural exports through the Black Sea ports in the first two weeks of August. As of
August 17, only 26 ships departed from the ports, carrying about 0.34 million tons of wheat,
corn, and sunflower oil, as well as 0.08 million tons of other types of grain and sunflower
products. The more updated expectation has reduced the goal to export up to 3 million tons of
grain products in September and possibly 4 million tons in future months (Polityuk, 2022b). 4
Therefore, we assume that the average export reduction across the major types of grain
products is 50% and 30% in August and September, respectively, and then reduce to an average
of 20% in the following months.
- Since the invasion, Russian troops have controlled over 20% of the agricultural land in Ukraine
(Wesolowsky, 2022). Ukraine 2022 spring sowing is about 22% lower than the 2021 level
(Polityuk, 2022c). In addition, it is reported that Russian troops have been stealing grain from
storage facilities (Welsh et al., 2022). Much of Ukraine’s agricultural infrastructure, including
grain storage, was damaged by Russian attacks (Holland and Nichols, 2022; Welsh et al., 2022;
The Economist, 2022). It is estimated that, compared to the previous year, crop productions in
4
We collected these data in August. However, latest statistics indicate that these early estimates roughly match
the actual amount of grain shipments since the signing of the treaty. By the end of October, more than 9.5 million
tons of gains and grain products have left Ukraine through the Black Sea ports (Polityuk and Nichols, 2022).
28

Ukraine in the 2022/2023 market year will be reduced by 41%, 29%, and 46% for wheat, corn,
and sunflower seed, respectively (USDA FAS, 2022).
- Before the signing of the Black Sea Treaty, there have been concerns of grain storage risk
because more than half of the storage capacity in Ukrainian-held territory was full due to the
stalled exports. Although storage space is enough for wheat and barley harvest starting in July,
the problem could become serious when the farmers start to dry corn in November (see
Appendix Figure B1 for the crop planting and harvesting schedule in Ukraine) (Polityuk, 2022d).
The reopening of the Black Sea ports has greatly relieved the pressure on grain storage in
Ukraine.
- In sum, the % grain export reduction on an annual basis is calculated by combining the data on
the actual export reductions by commodity before the Black Sea Port treaty and the actual and
projections of increase in export capacities by month after the signing of the treaty. For each
type of grain commodity, the same estimated export reduction percentage is applied across the
importing countries/regions.
Metal Exports:
- Monthly metal exports (in dollar values) from Ukraine at 4-digit HS code level from February to
May are collected from UN Comtrade (see Appendix Tables B4 and B5). Compared to the pre-
war level (in February), the average monthly metal export reduction is about 56% between
March and May across the major types of metal exports we included in the analysis. In the Base
Case analysis, we apply these percentage reduction levels for the entire one-year analysis
period. In addition, the same estimated export reduction percentage for each commodity is
applied across the importing countries/regions
B. For disruptions of Russian exports, the following factors are taken into consideration:
Grain exports:
- Russian exports of grain products for the 2021/2022 season were negatively impacted by
taxation issues, inflation, and export quotas (Bloomberg News, 2022). Compared to the
previous year, export reduction of wheat and coarse grains (grains other than wheat and rice)
was about 16% and 25%, respectively (USDA, 2022). However, grain exports (including both
wheat and coarse grains) of the 2022/2023 season are projected to return to the 2020/2021
season (USDA, 2022). Exports of corn are projected to remain at the 2020/2021 level in
2021/2022, and slightly increase in 2022/2023 season (USDA, 2022).
- Even in the midst of the War, Russian wheat exports have been rising in the new market season
(Reuters Staff, 2022b; Bloomberg News, 2022). For the 2022/2023 season (starting in July 2022),
it is projected that the export levels of both wheat and coarse grains will return to the
2020/2021 season amounts (USDA, 2022).
- Russia implemented an export ban on sunflower seeds from April 1 to August 31, 2022 to help
protect domestic producers. In addition, Russia implemented an export quota for sunflower oil
in April to help relieve price pressures in the domestic market. The cap was increased to 1.9
29

million tons in July (roughly about two-thirds of the annual export level in the 2020/2021
marketing year). The restrictions are in place until August 31, 2022 (Reuters, 2022a).
Metal exports:
- Since March 15, all 27 EU member countries implemented bans on imports of steel and iron
originating from Russia (EUR-Lex, 2022). The bans are currently extended until January 31,
2023. UK implemented similar bans on steel and iron imports from Russia on April 14 (U.K.
Statutory Instruments, 2022). It is assumed that iron and steel export to EU countries and UK
will be reduced by 100% during the period of these bans. These translate to about 91%
reductions of iron and steel export to these countries on an annual basis.
- There are also projections that the total iron and steel exports from Russia could fall by 23% in
2022 (Interfax, 2022b). We estimated that if the average reduction of iron/steel exports to all
other countries that have not implemented bans is about 4.8% on an annual basis, we can
obtain a weighted average of a 23% reduction of all the HS-72 (iron and steel) commodities
combined that are included in our analysis.
- UK suspended newly refined platinum and palladium from Russia since April 8 (Hobson, 2022).
- Overall, metal exports from Russian fell by about 20% in the second quarter of 2022 compared
to the same period in 2021 (Interfax, 2022a).
Table B1. Ukraine Exports of Major Types of Grains and Sun-flower Oil by Month (2022 $)
(February 2022 to May 2022)
Commodity Feb 2022 Mar 2022 Apr 2022 May 2022

Wheat and meslin 316.0 93.3 37.3 15.6
Barley 41.7 1.6 5.1 2.7
Maize (corn) 967.1 297.2 225.2 302.1
Sun-flower seed and other oils 564.7 175.0 237.2 317.0

Total 1,889.4 567.1 504.8 637.4
Table B2. Percent Reductions in Ukraine Export of Grains (compared to February 2022 levels)
Average %
Decrease from
Commodity Mar 2022 Apr 2022 May Pre-War Level
Wheat and meslin -70.5% -88.2% -95.1% -84.6%
Barley -96.1% -87.8% -93.4% -92.5%
Maize (corn) -69.3% -76.7% -68.8% -71.6%
Sun-flower seed and other oils -69.0% -58.0% -43.9% -56.9%
Total -70.0% -73.3% -66.3% -69.8%
30

Table B3. Shipments of Ukrainian Grain Exports through Black Sea Ports (August 1 – August 17)
Shipments (metric tons)

# of
Day Ships Sunflower Other Types of Data Source
Wheat Corn Barley
Oil Grains
1-Aug 1 26,500 Zinets (2022)
2-Aug
3-Aug
4-Aug
5-Aug 3 58,000 Butler and Polityuk (2022)
6-Aug
7-Aug 4 110,000 6,000 45000 (meal) Zinets and Butler (2022)
11,000
8-Aug 2 45,500 (soybeans) Kucukgocmen (2022a)
9-Aug
10-Aug 2 Nichols (2022)
11-Aug
12-Aug 2 3,000 60,000 Kucukgocmen (2022b)
3,000 (sunflower
13-Aug 2 12,000 seeds) Toksabay et al. (2022)
14-Aug 2 Isik and Toksabay (2022)
15-Aug
16-Aug 5 Butler (2022)
18,500 Erkoyun and Kucukgocmen
17-Aug 3 8,000 7,250 (sunflower meal) (2022)
Total 26 3,000 320,000 13,250 77,500
31

Source: USDA (2022).
Figure B1. Ukraine Crop Growing Seasons
Table B4. Ukraine Export of Major Types of Metal by Month (millions of 2022$)
(February 2022 to May 2022)
Commodity Feb 2022 Mar 2022 Apr 2022 May 2022

Iron ores and concentrates 432.8 439.9 367.6 330.5
Platinum, unwrought or semi-mfd 1.1 0.0 1.8 0.5
Pig iron and spiegeleisen 114.0 9.2 4.9 38.1
Spongy ferrous products
0.0 0.0 0.0 0.0
Semifinished iron or steel products
278.5 63.2 68.5 68.6
Fat-rolled iron or nonalloy steel prdcts
341.0 37.9 27.0 78.2
Alloy steel
7.1 1.7 5.4 1.5
Nickel, unwrought
0.4
Total 1,174.9 551.8 475.1 517.4
32

Table B5. Percent Reductions in Ukraine Export of Metal (compared to February 2022 levels)
Average %
Decrease from
Commodity Mar 2022 Apr 2022 May Pre-War Level
Iron ores and concentrates 1.6% -15.1% -23.6% -12.4%
Platinum, unwrought or semi-mfd -100.0% 61.9% -50.0% -29.4%
Pig iron and spiegeleisen -92.0% -95.7% -66.6% -84.7%
Spongy ferrous products -100.0% -100.0% -100.0% -100.0%
Semifinished iron or steel products -77.3% -75.4% -75.4% -76.0%
Fat-rolled iron or nonalloy steel prdcts -88.9% -92.1% -77.1% -86.0%
Alloy steel -76.3% -24.0% -79.2% -59.8%
Nickel, unwrought -100.0% -100.0% -100.0% -100.0%
Total -53.0% -59.6% -56.0% -56.2%
33

34

C. Summary
Based on these data, we first calculate export disruptions for the list of commodities presented in
Appendix Table A1 by export partner country of Ukraine and Russia. Then the estimates on 4-digit HS
export disruptions are first aggregated to the 17-region scheme adopted in the CGE model. The results
for the Base Case scenario are presented in Table 3 and Table 4 for the major 4-digit HS grain and metal
export disruptions for Ukraine and Russia, respectively. Export disruption values are presented for each
of the 17 regions. The last row of the tables presents the average percentage reduction with respect to
the total baseline export level for each commodity. The export disruption numbers are next aggregated
to the CGE sectors as presented in Appendix Table B6 and Table B7 in both dollar values and percentage
terms. Depending on the share of the disrupted 4-digit HS commodities with respect to the total trade
values of the more aggregated sectors in the 44-sectoral scheme, the percentage export disruptions
vary by sector and trading region.
Table B6. Disruptions of Grain and Metal Exports from Ukraine –Base Case
23 Metals and Metal
2. Grains and Crops 13. Minerals nec 15. Vegetable Oils and Fats 24 Ferrous metals
Products
Country/Region
Value Value Value Value Value
Percent Percent Percent Percent Percent
($ million) ($ million) ($ million) ($ million) ($ million)
1 Oceania 0.2 39.4% * 0.0% 10.9 41.3% * 0.0% * 0.0%
2 China 873.6 47.1% 307.9 12.3% 401.2 25.2% * 0.0% 421.0 68.9%
3 Japan * 6.0% 6.0 11.8% 2.7 41.3% * 0.0% * 0.0%
4 India 0.8 28.5% 1.1 5.4% 593.9 39.8% * 0.0% 4.0 14.6%
5 Rest of Asia 904.0 49.4% 6.9 9.4% 68.0 32.4% * 0.0% 191.0 56.5%
6 Canada 1.3 35.4% * 0.0% 1.3 40.9% * 0.0% 7.3 56.6%
7 USA * 0.0% 4.0 8.5% 23.2 41.1% * 0.0% 457.1 76.1%
Rest of North
8 America 3.1 50.5% * 0.0% 1.1 41.3% * 0.0% * 0.0%
9 Latin America 3.2 49.0% * 0.1% 7.8 37.4% * 0.0% 173.6 63.9%
NATO countries
(except US &
10 CAN) 983.2 45.4% 145.3 10.3% 704.6 28.9% 0.8 0.1% 1,875.7 51.2%
11 Rest of Europe 47.3 45.5% 43.4 12.2% 8.6 25.0% * 0.0% 71.5 43.3%
12 Russia * 0.0% * 0.0% * 0.0% 0.5 0.1% 121.9 23.1%
Rest of Former
13 Soviet Union 10.0 41.7% 0.3 0.9% 11.3 4.5% * 0.0% 77.3 24.5%
14 Ukraine * 0.0% * 0.0% * 0.0% * 0.0% * 0.0%
15 Middle East 536.1 48.1% * 0.0% 263.4 38.1% * 0.0% 462.4 54.2%
16 Africa 1,119.5 48.6% 8.8 10.1% 100.2 30.1% * 0.0% 412.3 49.1%
17 Rest of World * 0.0% * 0.0% * 0.0% * 0.0% * 0.0%
Total 4,482.2 47.6% 523.8 11.1% 2,197.9 30.7% 1.3 0.1% 4,275.1 51.9%
35

Table B7. Disruptions of Grain and Metal Exports from Russia – Base Case
23 Metals and Metal
2. Grains and Crops 13. Minerals nec 15. Vegetable Oils and Fats 24 Ferrous metals
Products
Country/Region
Value Value Value Value Value
Percent Percent Percent Percent Percent
($ million) ($ million) ($ million) ($ million) ($ million)
1 Oceania * 0.0% * 0.0% 0.4 22.8% * 0.0% * 0.0%
2 China 1.4 2.8% 176.4 7.0% 188.1 17.1% * 0.0% 38.4 4.4%
3 Japan * 0.0% 4.7 4.1% 0.6 32.4% * 0.0% 0.5 0.4%
4 India * 0.0% * 0.0% 111.2 30.4% * 0.0% * 0.0%
5 Rest of Asia 89.3 6.9% 2.5 1.8% 42.7 27.9% * 0.0% 104.1 3.8%
6 Canada * 0.0% * 0.0% * 27.8% * 0.0% * 0.0%
7 USA * 0.0% 3.4 13.5% 0.1 23.9% * 0.0% 24.7 4.0%
Rest of North
8 America 1.5 7.8% * 0.0% * 0.0% * 0.0% 30.1 4.2%
9 Latin America 5.5 7.8% 6.5 12.4% 0.1 12.6% * 0.0% 5.3 3.6%
NATO countries
(except US &
10 CAN) 157.9 7.3% 137.9 13.0% 159.2 11.6% 2,051.5 7.0% 1,949.8 30.5%
11 Rest of Europe 2.9 7.1% 12.7 8.8% 7.1 8.0% 344.3 10.5% 16.3 6.2%
12 Russia * 0.0% * 0.0% * 0.0% * 0.0% * 0.0%
Rest of Former
13 Soviet Union 50.1 7.6% 0.3 0.0% 191.9 20.2% 0.8 0.0% 45.9 1.0%
14 Ukraine 0.5 3.9% 40.5 17.2% 7.5 12.8% 0.1 0.0% 2.4 1.0%
15 Middle East 138.9 10.1% * 0.0% 36.6 30.2% * 0.0% 17.4 3.2%
16 Africa 283.6 7.9% 10.8 9.2% 78.6 22.6% * 0.0% 24.7 3.7%
17 Rest of World * 0.0% * 0.0% * 0.0% * 0.0% * 0.0%
Total 731.5 7.9% 395.5 7.8% 824.0 18.1% 2,396.6 5.1% 2,259.6 12.4%
36

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The Economic Impacts of Russia-Ukraine War Export Disruptions of Grains and Metals *

November 22, 2022

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II. Estimation of Grains and Metals Export Disruptions

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Ukraine Russia Global

Table 2. Ukraine and Russia Export Values of Metals in 2020

Ukraine Ukraine Russia Russia Global

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A. The GTAP Model

B. Methodology to Simulate Commodity Export Disruptions

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Export Reduction from Export Reduction from Export Reduction from

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S.D. 0 0 0 0 0 0.0001 0 0 0 0 0 0 0 0.0091 0 0 0

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A. Comparison to Other Literature

B. Limitations of the Analysis

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Global Trade Analysis Project (GTAP). https://www.gtap.agecon.purdue.edu/

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United Nations Statistics Division. 2022. UN Comtrade Database. https://comtrade.un.org/data/.

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HS Code Commodity GTAP Sector CGE Sector

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Commodity Feb 2022 Mar 2022 Apr 2022 May 2022

Sun-flower seed and other oils 564.7 175.0 237.2 317.0

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Shipments (metric tons)

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Figure B1. Ukraine Crop Growing Seasons

Commodity Feb 2022 Mar 2022 Apr 2022 May 2022

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