Russia-Ukraine War Disrupts Wheat Exports, Sending Global Food Prices Soaring

Global food prices have reached their highest level since late 2022 due to disruptions caused by the Russia-Ukraine war. The UN Food and Agriculture Organization's Food Price Index rose to 133.3 points in August, up from 130.8 in July.

The index remains around 17% below its peak in March 2022 following Russia's full-scale war on Ukraine. The Polish Economic Institute (PIE) attributed the rise in prices to attacks on port infrastructure and shipping in July and August, which halted much of the grain trade from Russia and Ukraine.

Ukraine's wheat exports fell to 1.6 million metric tons between Aug. 1 and 28, around 60% below the level a year earlier and only about 20% of the country's potential export capacity. Russian wheat exports also declined by 56% year-on-year in August, with shipments totaling 1.6 million metric tons, their lowest level for the period since 2017/18.

The disruption is already affecting international markets, with wheat futures rising around 30% year-on-year in August to their highest level in more than three years. Asian importers have started shifting purchases toward Australian and Argentine wheat as deliveries from Russia and Ukraine become less reliable.