Black Sea Conflict Sparks Global Grain Shortage
The ongoing conflict between Russia and Ukraine has severely impacted grain exports from the Black Sea region. According to Reuters calculations, over 97% of Russia and Ukraine's grain export capacity in the Sea of Azov and Black Sea basin has been shut down due to attacks on shipping.
Ukraine and Russia together exported an average of 7.2 million tonnes of grain per month from terminals in the Azov and Black Sea region last season, but this figure is now significantly reduced. In Ukraine, all seaports in the Odesa port hub ceased operations at the end of July, with no new ship calls recorded since mid-August.
Ukraine's agriculture minister Taras Vysotskyi stated that if ports remain blocked, they will be able to reach 50% of their export potential. Russia can redirect some exports through Baltic, Caspian, and Far Eastern ports, but this is expected to create logistical challenges and increase costs.
As a result of the shutdowns, global wheat prices have risen about 6.5% this month and are now about 30% higher than a year ago.