Russia-Ukraine War Spikes Global Wheat Prices Amid Supply Disruptions

The ongoing Russia-Ukraine war is causing significant disruptions to global wheat supplies, leading to higher prices for buyers. Global wheat importers in Asia, the Middle East, and Africa are struggling to secure supplies from the Black Sea region due to attacks on vessels and port infrastructure since July.

Benchmark Chicago futures have surged 40% from June lows to a three-and-a-half-year high, while physical prices from alternative exporters have risen sharply. Top global buyer Egypt is scheduled to receive less than a tenth of the volume it received from Russia and Ukraine in the September-to-October period last year.

Indonesian millers are turning to other suppliers, including Argentina, and are paying around 20% to 25% more for Australian wheat. Ole Hansen, head of commodity strategy at Saxo Bank, warned that competition for cargoes will intensify until the end of the year when the Southern Hemisphere harvest kicks in.