Wheat Prices Soar as Russia-Ukraine War Disrupts Global Supplies
Global wheat buyers are bracing for higher costs as the Russia-Ukraine war continues to disrupt grain shipments. The Black Sea region, a major supplier of wheat, has seen cargo movements come to a near standstill since July due to attacks on vessels and port infrastructure.
The constraints have triggered a rally in prices, with Chicago futures climbing 40% from June lows to a three-and-a-half-year high. Physical prices from alternative exporters are surging, threatening food inflation for vulnerable consumers.
Top wheat importers in Asia, the Middle East, and Africa have been finding it hard to secure supplies as they wait for an agreement between Russia and Ukraine to allow grain shipments. Some buyers are seeking alternatives, but competition is poised to intensify until the Southern Hemisphere harvest kicks in at the end of the year.
Egypt's wheat imports dropped to 143,870 tons in the first half of September, from 876,139 tons a year ago, when Russia and Ukraine accounted for most shipments. The country is turning to France and other European suppliers, but some buyers are still shying away from alternatives due to domestic supplies.