Black Sea Wheat Crisis Sparks Global Food Supply Chain Chaos

The global food supply is facing a crisis due to the disruption of wheat shipments from Russia and Ukraine. The two countries account for more than a quarter of global wheat trade, with their combined exports estimated to fall to roughly half their level for the July-to-September harvesting period last year.

The immediate problem is not just that grain is being delayed, but also that the global food system relies on a small number of highly productive regions and efficient maritime routes. When these routes are attacked, alternative supplies exist, but they are more expensive, slower, less developed or unable to handle comparable volumes.

The experience of Golden Wheat in Ho Chi Minh City shows how the disruption affects buyers far from the conflict zone. The company had secured four cargoes of Black Sea wheat before being told that the shipments would not move. They replaced two cargoes with Bulgarian wheat and turned to the United States for additional supplies at a higher price.

The geography of alternatives explains why replacing Black Sea grain is difficult. Bulgaria's Burgas port has helped absorb some demand, while buyers have approached France, Romania, Argentina, Australia, and the Baltic states.