Black Sea Grain Disruptions Threaten Global Food Prices

The conflict between Russia and Ukraine is causing significant disruptions to global wheat supply chains. According to Andrey Sizov, managing director of SovEcon, the current Black Sea situation is hitting the wheat market harder than geopolitical risks in the energy sector.

Russia is the world's largest wheat exporter, while Ukraine ranks fifth, together supplying approximately 30% of global wheat demand. Oxford Economics estimates that port disruptions in both countries this year could reduce global grain supply by as much as 86 million tonnes, equivalent to roughly 17% of total global grain exports.

The situation on the ground is severe, with cargo operations at Black Sea ports such as Odesa largely grinding to a halt. Meanwhile, after Ukraine struck Novorossiysk last week, all three major grain terminals at the port suspended operations.