77 percent of Japanese companies in Europe see Russian invasion

TokYO Kyodo - Some 77 percent of Japanese companies in Europe have seen Russia's invasion of Ukraine mainly due to a rise in energy and food prices and disruptions in logistics, according to a survey.

The survey of 1,445 companies conducted by the Japan External Trade Organization between September 1 and 26 shows the heftier impact, with 83.7 percent of the sector saying their business has suffered due to the war in Ukraine.

Among 605 companies that responded to a multiple choice question about the negative factors, 65.1 percent said rising energy prices, 55.9 percent said higher prices of raw materials and resources such as plastic and rubber products, while 54.0 percent raised disruptions and bottlenecks in logistics.

Akiko Ueda, an official at JETRO, said the survey shows the severity of the Ukraine war on business operations.

Nearly 80 percent of the companies said they feel negatives from the Ukraine war undermines the situation where they can't escape damages even if they pass on prices to customers, which is a priority for the resolution to the conflict, Ueda said.

The Ukraine crisis, triggered by Moscow's invasion in February, has caused grain exports from the East European country to stagger, leading to hikes in the price of food. JETRO said that companies in the food industry as well as the farm and fisheries processing sector were particularly affected.

The auto industry suffered as it was forced to scale back or halt operations in Russia and saw increases in prices of energy, raw materials and parts.

50.5 percent of 501 companies giving answers to a question about countermeasures said they passed higher costs on to customers. Some 27.5 percent have diversified their supply base, while 25.1 percent are looking for new customers. In the manufacturing sector, 29.4 percent said they have increased their inventory.

The companies cited the uncertain outlook for when the hostilities will end and when business can resume in Russia, citing concerns over the Ukraine crisis.