Ukraine-Iran Conflicts Fuel Grain Price Volatility
The ongoing conflicts in Ukraine and Iran are having a significant impact on grain and energy markets, affecting Australian farm margins. The Black Sea grain flows remain heavily disrupted due to recurring attacks by Russia and Ukraine on each other's infrastructure.
Egypt is shifting its wheat purchases towards France and other European suppliers as Russian and Ukrainian supply becomes less reliable. This change in demand has led to increased business for exporters with reliable supply chains, such as those operating out of France, Bulgaria, and Romania.
The Middle East conflict, specifically the US military involvement under Trump in Iran, is disrupting energy and refined fuel markets, leading to higher diesel costs that feed directly into harvest, freight, and contracting. Global diesel prices have hit record highs due to refinery damage and export restrictions from Russia and the Middle East.