Russia-Ukraine War and Drought Send Wheat Prices Soaring

Wheat prices have skyrocketed due to disruptions in Black Sea exports caused by the ongoing Russia-Ukraine war and changing weather patterns that have led to droughts, significantly reducing production.

The conflict has resulted in strikes on ports, vessels, and grain facilities, forcing shippers to delay or cancel cargo loadings during the peak export season. Russian missile attacks have impacted Ukraine's grain exports, while Ukraine's drone attacks in the Sea of Azov have curtailed Russian shipments of both grain and wheat.

According to Joe Glauber, a research fellow emeritus at the International Food Policy Research Institute, 'There's plenty of wheat in Russia and Ukraine, and ultimately that wheat will make it out on to the market. But right now it can't, or it comes out with a very high cost, and so wheat prices have reflected that.'

The Chicago wheat futures, the global benchmark for the grain market, hit a three-year high of $7.79 per bushel in July, while authorities in Russia's Rostov region called a state of emergency due to port closures and navigation disruptions.