Wheat Prices Soar as Geopolitical Tensions Escalate in Europe
Record wheat prices are sending shockwaves through Europe as geopolitical tensions intensify in the region. The Strait of Hormuz blockade has driven up oil and gas prices, while attacks on energy and port infrastructure have crippled grain exports from Ukraine and Russia.
The price of December wheat on Euronext exceeded €255 earlier this week, a level not seen in years. This is attributed to geopolitical tensions rather than recent droughts. Since July, attacks on ships around the ports of Odesa in Ukraine and Novorossiysk in Russia have intensified, severely damaging main export routes for grains.
Ukraine and Russia account for 27% of global grain exports, with a combined total of just over 65 million tons in 2024-25. August and September are usually prime months for grain exports from the region, but recent attacks have at least halved exports. The new harvest is in, and storage is full, yet damage to port infrastructure prevents ships from leaving.
As a result, many countries across Africa, Asia, and the Middle East are facing severe shortages ahead of winter, with significant implications for diplomacy and trade. Russia has used its wheat exports as a diplomatic weapon, selling at a discount in return for support. Without wheat, Moscow's bartering power has declined significantly.