Global wheat prices focus on escalating Black Sea attacks 

In the days since its withdrawal from the accord, which was initially agreed a year ago, Russia has repeatedly targeted Ukraine’s agriculture infrastructure — shelling ports and damaging crop terminals. File picture

Global wheat prices fluctuated as threats surrounding grains trade in the Black Sea escalated, with both Ukraine and Russia warning that ships headed to each other’s ports could be considered military targets.

Ukraine issued a tit-for-tat response to an earlier warning from Moscow, after US intelligence alerted that Russia had laid explosives at Ukrainian ports. The Black Sea is a key exit route for agricultural commodities from both countries, and the threats raise the risk of global food trade facing mounting obstacles and pushing up prices.

Wheat futures swung between losses and gains in Thursday trade, after having surged more than 11% in the previous two sessions, with Russia earlier this week ending the Ukraine grain deal. 

That had helped to keep trade flowing for a time and marked a rare example of Russian co-operation during its war. A breakdown of the trade route will force supplies to world markets through narrower and more cumbersome avenues. 

In the days since its withdrawal from the accord, which was initially agreed a year ago, Russia has repeatedly targeted Ukraine’s agriculture infrastructure — shelling ports and damaging crop terminals. Ukraine’s largest sunflower-oil producer, Kernel, said damage at one of its facilities could take at least a year to repair.

Targeting such infrastructure “marks a new phase in the conflict”, according to Paris-based adviser Agritel. On top of that, export capacity is being shut off at the same time as many of Ukraine’s crops are coming to harvest. 

All ships using the Black Sea corridor had departed Ukraine before the grain deal came to a close. The last vessel — the TQ Samsun — cleared its outbound inspection on Monday in Istanbul. The Black Sea ports are a vital artery for Ukraine’s crop sales abroad. 

The shutdown — and the new threats to shipping — will heighten the need for alternative routes to get Ukrainian crops to market. The nation has increased reliance on its Danube River ports and rail and road routes via the EU. 

Bloomberg