Asia Abandons Black Sea Grain as Ukraine-Russia Disruptions Bite

Asia's major grain importers are shifting their purchasing away from the Black Sea region due to ongoing attacks on Ukrainian and Russian ports and vessels. The shift is evident in Indonesia, which has already purchased Australian wheat for September-October delivery. Other Southeast Asian countries have booked similar cargoes, while Bangladesh buyers are seeking offers for Romanian wheat.

Some importers are also considering supplies from as far as North America. Existing contracts for Ukrainian and Russian grain are facing problems due to shipowners' reluctance to enter high-risk areas of the Black Sea. Traders are offering Asian buyers grain from Romania and Bulgaria instead, with some contracts being canceled under force majeure.

Ukraine and Russia together account for more than a quarter of global wheat exports, meaning prolonged disruptions could significantly reshape global trade flows. Sea freight costs from Ukraine have risen sharply, reaching nearly $90/t for August shipments to Indonesia compared to around $70/t several weeks ago.

The Ukrainian grain export in August has already fallen by around 76% year-on-year amid the effective blockade of the country's Black Sea ports. Russian exports have also been disrupted following the shutdown of major grain terminals in Novorossiysk.