Black Sea Grain Exports Plummet Amid Russia-Ukraine Conflict

The conflict between Russia and Ukraine has led to a significant disruption in grain exports from the Black Sea region, with attacks on shipping causing over 97% of capacity to grind to a halt. This has resulted in a major loss of low-cost supplies for importers in the Middle East, Africa, and Asia, who are now facing higher prices due to the shortage.

According to Reuters calculations, Russia and Ukraine exported an average of 7.2 million metric tonnes of grain per month from terminals in the Azov and Black Sea region last season. However, with Ukrainian seaports in the Odesa port hub effectively ceasing operations at the end of July, there are no shipments from these terminals.

Russia can redirect some exports through Baltic, Caspian, and Far Eastern ports, but this is likely to create logistical challenges and increase costs. Global wheat prices have risen about 6.5% this month and are now roughly 30% higher than a year ago.