Black Sea Disruptions Fail to Spark Wheat Price Surge

Russia and Ukraine are facing increasing difficulties in moving grain through the Black Sea due to repeated attacks on the Odesa port hub. As a result, Ukraine has reduced its 2026/27 grain export forecast from 43 million tonnes to 38-40 million tonnes.

The problem is shifting from production to logistics as both countries harvest sizeable crops despite the ongoing war. APK-Inform estimates that Ukraine's grain harvest will be around 60.5 million tonnes, but it may struggle to move this quantity due to disruptions in Black Sea exports.

The lack of normal Black Sea exports could create an 11 million tonne shortfall in grain storage capacity, according to Ukrainian estimates. To mitigate this issue, Kyiv is exploring alternative routes through Moldova and Romania's Constana port, while Russia is preparing subsidies for rail freight to redirect agricultural exports away from the constrained routes around the Sea of Azov.

Despite these disruptions, global wheat prices remain surprisingly subdued, reflecting large crops and confidence that alternative export routes will keep some grain moving. Chicago wheat was unchanged over the week at the equivalent of $A334/t, while French wheat fell 2pc and Minneapolis wheat lost 2pc.