'Geopolitical Influences'

The rise & fall of Germany as a global manufacturing powerhouse provides a concrete case study to demonstrate how trade flow shifts tend to be intentional.

This report continues to investigate global trends in food and commodity inflation related to wars, trade sanctions and labor costs. After World War II, Germany rose to become a dominant global player in manufacturing in energy-intensive industries like cars, appliances and chemicals. Immigrant labor from Turkey helped keep wages down for a time.

Since the 1970’s, trade relations between Russia, Ukraine, China and Germany’s NATO allies have been shapeshifting, according to Jeff Rubin in his new book A Map of the New Normal. This telling of the Nord Stream pipeline bombing under the Baltic Sea in 2022 demonstrates the foresight and intentionality of global leaders in controlling energy costs and access.

Agriculturalists and food industry stakeholders operate businesses in products with tight relationships to energy markets. Whether through the substitution economics of various feedstocks for sustainable biofuels, or the broad investor-driven capital flows in and out of commodities, there’s an inextricable link to understand and to monitor, which is the reason for highlighting this case study.

How Germany First Became Reliant on Russian Energy

Attempting to thaw Cold War relations in the 1970’s, Germany aligned with Russia to import newly-discovered natural gas from Siberia. Shipping across pipelines in Ukraine, Germany quickly grew to rely on Russian LNG (liquified natural gas).

Disputes started to arise over the transit fees charged by Ukraine, leading Russia to suspend shipments for 20 days in 2008. The move caught news headlines because it spiked heating costs to households in Germany.