Black Sea Disruptions Send Global Grain Prices Soaring

Attacks on shipping in the Black Sea have brought grain exports from Russia and Ukraine to a near standstill, affecting global prices. The two major grain exporters have intensified attacks on ports and shipping over the past month, leaving importers facing higher costs for supplies. According to Reuters calculations, Russia and Ukraine together exported an average 7.2 million metric tons of grain per month last season from terminals in the Azov and Black Sea region.

However, with current shutdowns, this capacity has been reduced by more than 97 percent. In Ukraine, there are currently no shipments from its Black Sea terminals, while Russia's only functioning grain terminal is a small facility in Tuapse with a capacity of about 160,000 tons per month. Global wheat prices have risen about 6.5 percent this month and are now roughly 30 percent higher than a year ago.

Analysts at Rusagrotrans estimate that Russia's August wheat exports will be 1.8 million tons, the lowest level for the month since 2010. Trade sources also reported that major Russian grain terminals in Novorossiysk were shut after a Ukrainian drone strike, while operations at other key facilities have been suspended.

Ukraine has redirected some of its exports through rail links with Eastern Europe and Danube river ports, but the country's Agriculture Minister Taras Vysotskyi expects that if ports remain blocked, it will only reach 50 percent of its export potential.