Black Sea Grain Exports Plummet Amid Renewed Russia-Ukraine Conflict

Russian and Ukrainian ports on the Black Sea and Sea of Azov are experiencing renewed disruptions to grain exports, similar to those seen in 2022 when Russian forces attacked Ukrainian infrastructure. In recent weeks, Russia has targeted merchant ships sailing to these ports, causing crews to hesitate due to the risks involved.

Ukraine has launched strikes against Russian targets, leading to a response from Russia in targeting Ukraine's grain exports. The Sea of Azov is largely closed to Russian shipping due to Ukrainian drone attacks, and Ukraine has damaged grain terminals at Russia's Black Sea port of Novorossiysk, which accounts for over 30% of Russia's wheat exports.

The impact is already visible, with combined Russian and Ukrainian wheat exports potentially reaching only 2.5m tonnes this August, down from 6.3m tonnes last year. This disruption to agricultural exports leaving the Black Sea is described as 'the worst it has ever been' by Carlos Mera of Rabobank.

Both countries are exploring alternative routes for their grain exports but face significant challenges. Ukraine began using road and rail in 2022, traveling along the Danube River to ports considered safe from attack. However, capacity on this route is limited due to low water levels, and farmers elsewhere in Eastern Europe complain that it creates extra demand for shipping and haulage.