Black Sea Grain Disruptions Drive Up Wheat Prices Globally

Global wheat importers are bracing for tighter supplies as attacks on Black Sea grain infrastructure disrupt shipments, heightening food security risks for top buyers such as Egypt and Indonesia.

Benchmark Chicago futures have climbed more than 17% since the start of July, fueled largely by a shortfall in Black Sea supplies, with physical prices making strong gains in rival exporters Argentina, Australia, and the United States.

Tit-for-tat attacks by Russia and Ukraine on ports and vessels in recent weeks have shuttered grain terminals and forced shippers to delay or cancel loadings for dozens of cargoes during the peak export season.

Buyers are thinking about replacing some of these cargoes with other origins, such as Australia, North America, and Argentina, but switching imports will come at substantially higher prices. Australian Premium White wheat is quoted at around $315 to $320 a ton, including cost and freight to Asia, well above the cheapest U.S. wheat, priced at about $305 a ton.