Russia-Ukraine War Sends 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 (FAO) Food Price Index rose to 133.3 points in August from 130.8 in July, with all five major food categories experiencing price increases.

The index remains around 17% below its March 2022 peak following Russia's full-scale war on Ukraine. The disruption is largely attributed to attacks on port infrastructure and shipping in July and August, which have halted much of the grain trade from Russia and Ukraine. These countries account for approximately one-third of global wheat exports.

Russian strikes on Ukrainian ports in Odesa and along the Danube reduced Ukrainian wheat exports 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. Meanwhile, Ukrainian drone strikes on Russia's Novorossiysk port contributed to a 56% year-on-year fall in Russian wheat exports.

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 begun shifting purchases toward Australian and Argentine wheat due to the reduced reliability of deliveries from Russia and Ukraine.