War-Driven Wheat Shortage Hits Global Buyers with Higher Costs

Global wheat buyers are bracing for higher costs as the Russia-Ukraine war continues to disrupt grain shipments from the Black Sea region. The conflict has brought cargo movements to a near standstill since July, triggering a rally in prices and leaving importers with dwindling supplies.

The benchmark Chicago futures price has climbed 40% from June lows to a three-and-a-half-year high, while physical prices from alternative exporters have surged. Top wheat importers in Asia, the Middle East, and Africa are struggling to secure supplies, with some turning to other suppliers like Argentina and Australia.

No. 2 global importer Indonesia has received only about 60,000 tons of wheat from the Black Sea this month, down from half a million tons last September. Indonesian millers are paying around 20% to 25% more for Australian wheat than the prices at which they previously booked Black Sea cargoes.

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. However, Egyptian buyers are still shying away from alternatives, preferring wheat varieties they are accustomed to processing and holding out for prices that could drop as much as one-fifth if Black Sea shipping is restored.