KOTRA Activates Emergency System for Lunar New Year Holiday... "Responding to Ukraine Situation"

Countermeasures Team Connecting Domestic and International, Maintaining Readiness During Seol Holiday
Monitoring Impact on Exports and Supply Chains to Minimize Corporate Effects

[Asia Economy Reporter Lee Hye-young] KOTRA announced on the 28th that it will activate an emergency response system during the Lunar New Year holiday period in consideration of the escalating tensions between Ukraine and Russia.

KOTRA has formed a task force led by its headquarters' Global Supply Chain Office and Regional Research Office, planning to strengthen monitoring and communication with local companies and Russian and Ukrainian buyers even during the holiday period. Additionally, it will operate an emergency contact network with local agencies, embassies, and Korean community organizations, and prepare scenario-based responses according to the situation.

KOTRA judged that the escalating tensions between Russia and Ukraine, along with the US sanctions warnings, could lead to disruptions in the global supply chain. Therefore, the recently established 'Global Supply Chain Office' will take charge of responding to related matters.

As of last year, South Korea's trade volume with Russia and Ukraine was $27.3 billion and $900 million respectively, accounting for about 2.2% and 0.8% of total trade. Although the trade volume between South Korea and Russia and Ukraine is not large, concerns are growing that the ripple effects could expand as the US warns of strong financial and trade sanctions against Russia.

Companies believe that even if armed conflict between Russia and Ukraine does not materialize, the ongoing tense situation could affect the supply chains of raw materials such as crude oil, gas, and minerals.

Some companies operating in Russia are reportedly preparing for the worst-case scenario by taking measures such as early payment collection from buyers, advance payment transactions, and increasing the proportion of dollar holdings in anticipation of the ruble's depreciation.

The local KOTRA trade office stated, "If economic sanctions become a reality, exports of our home appliances, mobile phones, automobiles, and parts could shrink, and supplies of crude oil, natural gas, and coal from Russia, as well as minerals and grains such as krypton and xenon from Ukraine, could be affected." It added, "The proportion of Russian origin in our imports of thermal coal and anthracite reached 16% and 41% respectively (as of 2021), and Ukrainian exporting companies are concentrated in the border areas with Russia and Belarus, which are risk zones in the event of conflict, which is a cause for concern."

KOTRA President Yoo Jung-yeol said, "We will closely monitor the potential impact on exports, imports, and the global supply chain in preparation for the worst-case scenario, cooperate with related organizations, and strive to minimize damage and support the safety of companies operating abroad and the public."

This content was produced with the assistance of AI translation services.