Putin’s war increases the pain for Germany’s industrial giants

The business effects of Putin’s war in Ukraine can be seen all around us these days, but the numbers that came in this morning from Germany’s federal statisticians are nonetheless shocking.

Producer prices of industrial products were last month up 33.5% year-on-year. The trend is clearly accelerating too, with the producer price index (PPI) having been up 30.9% in March, and 25.9% in what now seem like the halcyon days of January.

The driver, of course, is energy, the prices of which were up more than 87% year-on-year. The price of natural gas is the main culprit, with industrial consumers having to pay an eye-bleeding 260% more than they did in April 2021. For power plants, the price of natural gas has more than quadrupled. No wonder millions are in fuel poverty—and all this is before Germany agrees to quit Russian gas, as it inevitably will.

European demand for U.S. liquefied natural gas is already at record highs, thanks to record price spikes back home, and now we’re seeing the effects in the U.S., where natural gas prices are at levels not seen in 13 years. That in turn will mean higher electricity and plastics prices, among other things.

But what can we do? If Russia’s Ukraine invasion has taught us anything, it’s that not properly addressing the Russian threat in past years only emboldened Putin. Continuing to send him vast amounts of money for fossil fuels (more on which in the news blurbs below) would only set up worse problems down the line—and would of course be morally grotesque, given that the cash is funding slaughter in Ukraine.

Anyway, it’s been a tough week and the weekend thankfully looms, so let’s close on a piece of positive news: Indonesia will lift its ban on palm-oil exports next week. Yes, palm oil is bad on many fronts, but there’s a global food crisis right now (thanks again, Vlad) and anything that relieves the pressure at this moment is to be welcomed.

More news below.

David Meyer
@superglaze
david.meyer@fortune.com

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AROUND THE WATERCOOLER

Russian oil

The U.S. is reportedly preparing to try imposing a global price cap on Russian oil, to be enforced by highly controversial "secondary sanctions" that would hit buyers (think China and India) who try paying more. The idea is to keep Russian oil flowing, thus stopping further oil-price leaps—but without paying so much to Moscow that the money maintains its war effort in Ukraine. Fortune

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This year's $1 trillion crypto sell-off is bad, but its main American victims are a relatively small number of late-joining crypto bulls. Goldman Sachs economists reckon U.S. HODL-ers lost around $300 billion in the last six months, which is only around 0.3% of household wealth (stocks, by contrast, represent a full third.) Fortune

This edition of CEO Daily was edited by David Meyer.