Grain Market Disruptions Mount Amid Sea of Azov Closure, Strait of Hormuz Restrictions

Global grain markets are experiencing disruptions due to three separate developments: the Sea of Azov closure, restricted trade via the Strait of Hormuz, and China's soybean purchases.

The Sea of Azov accounts for approximately 35% of Russian wheat exports. Cargoes move on draft-restricted coasters, which shuttle grain to Kavkaz, outside the Kerch Strait, for transshipment onto larger vessels or direct delivery to nearby destinations mainly in Türkiye.

The closure has reduced Russia's wheat export capacity by as much as 6.5 Mt during H2 2026. The disruption is particularly affecting MENA region importers who source more than 60% of their wheat imports from Russia and Ukraine.

Restrictions on the Strait of Hormuz are impacting Gulf fertiliser exports, although Saudi Arabia and the UAE have rerouted grain imports. Iraq has no alternative routing available, resulting in limited grain vessel arrivals since early June.