Original Article By “Tyler Durden” At ZeroHedge.com
The latest example of G-20 countries not bowing down to US pressure to halt trade relations with Russia comes from South America.
On Tuesday, in response to the World Trade Organization’s (WTO) Director-General Ngozi Okonjo-Iweala’s request for Brazil to increase more food exports, Brazilian President Jair Bolsonaro asked the WTO not to sever trade flows with Russia. He said there are 27 Russian vessels hauling fertilizer to Brazil.
Now, why would Bolsonaro go against the wishes of the US and EU politicians to eliminate trade with Russia?
Well, the South American country imports more than 85% of its fertilizer demand. Russia is its top supplier, and Belarus provides 28% of the total.
Restraining fertilizer consumption would be absolutely disastrous, crush harvest yields, and threaten the world’s food security. The country is a top exporter of coffee, sugar, soybeans, manioc, rice, maize, cotton, edible beans, and wheat.
This is more evidence that G-20 countries, such as Brazil, India, and China, widely known as BRICs, disregard US pressure to halt trade with Russia. Many of these countries are dependent on Russia and Belarus for commodities. In one chart, here is Russia’s commodity reach:
Defiant G-20 countries imply the old economic order, in which the dollar’s centrality to global trade remains king, is fading. Numerous countries are already trading outside the dollar system (see & here) because Western sanctions isolated Russian banks from the SWIFT payment system. This has given rise to commodity-based currencies.
It remains to be seen if South American traders will use a Brazilian real-Russian ruble payment system for the fertilizer purchases.