Black Sea Conflict Drives Up Global Food Prices

Escalating hostilities in the Black Sea have led to increased concerns over global food prices. The conflict between Russia and Ukraine has resulted in the deaths of at least 23 people in July, with attacks on 35 ships in the area. This makes the Black Sea the most dangerous waterway for commercial shipping, surpassing even the Strait of Hormuz.

The majority of Russian grain exports are shipped from the Black Sea ports, with over 70% of their seaborne grain exports coming from these areas. Ukraine, which had a bumper harvest this year, has also been unable to export large volumes through its Black Sea ports due to the conflict.

Russian and Ukrainian grain exports have significantly reduced as a result of the attacks on port infrastructure and vessels. This disruption is likely to push global wheat prices higher and exacerbate other food supply shocks. Analysts at Oxford Economics predict that global food prices will rise by nearly 12% this year and a further 4.8% in 2027.