The Russian invasion of Ukraine is set to be felt by Australian retailers with analysts tipping even bigger price rises for freight with fuel cost rises of over 20% tipped as well as hit to supplies of materials for processors.

As big European Countries such as Germany, France, Denmark and Austria who have the financial muscle and military hardware to support Ukraine, sit back and watch the war unfolding with their next-door neighbours, analysts are also tipping a hit to processor and chip production.

Russia and Ukraine produce the vast bulk of the neon used in semiconductor production and if this is cut off Countries such as Taiwan and China will face processor manufacturing problems.

China is the world’s biggest exporter, and almost every technology supply chain relies on Chinese sourcing for something.

Breaking the rest of the world’s dependence on Russia, let alone China, is a multidecade project that many mainstream suppliers to CE and appliance retailers are now undertaking with moves to new Countries in an effort to minimise impacts on their manufacturing operations.

Global markets tanked on Thursday as Europeans and the US market woke up to images on their television screens showing Russian forces moving deep into Ukraine.

The Australian and UK Governments are now implementing bans on Russian businesses, US President Joe Biden announced a flurry of sanctions that focused on Russia’s financial sector, rather than its energy industry.

The Biden administration has vowed to “aggressively enforce” stringent sanctions against Moscow in retaliation for its military assault on its neighbours to the west.

According to Bloomberg, Senior Biden administration officials told House and Senate leaders that China, if it’s inclined to mitigate the effect of American sanctions on Russia, cannot produce the sort of sophisticated semiconductors the U.S and its allies are blocking, according to a person familiar with the briefing calls.

The officials, including Secretary of State Antony Blinken, Defense Secretary Lloyd Austin, General Mark Milley, chairman of the Joint Chiefs of Staff as well as Treasury Secretary Janet Yellen, briefed senators and representatives on separate calls.

The officials, the person added, declined to provide a timeframe on, if or when, Kyiv might fall to Russian forces, and told lawmakers there would be more U.S. troop deployments to NATO allies in coming weeks.

An invasion of Ukraine, which has been dubbed “the breadbasket of Europe” because it is a major producer of wheat, barley, corn and rye that is consumed largely by Europe, may upset supply chains even further while leading to agricultural and gas supply growth opportunities for Australia.

Russia is a major exporter of oil and natural gas, and while Australians were already feeling the pinch at the pump the conflict could push up freight costs significantly in coming weeks, claim Goldman Sachs analysts.

There are some good news analysts do not anticipate that the crisis will be prolonged or that Australians or the USA will be dragged into war.

“While there may be some additional volatility in the short term, these dislocation events historically present opportunities, as long as recession doesn’t follow,” Cliff Hodge, chief investment officer of Cornerstone Wealth said overnight.