Wheat prices remain elevated on rising concerns over Black Sea volatility

Wheat prices remain elevated on rising concerns over Black Sea volatility

Despite the recent increase, grain prices are still lower than they were on the eve of Russia’s invasion of Ukraine in February 2022, partly because the end of the deal was expected, Mr. Allender said. In addition, Ukrainian grain exports have been at a low level recently due to limited labor, war workers, limited fuel supplies, and territory lost to Russia.

Ukraine has also increased exports by truck, train and river boats.

Dutch bank Rabobank said on Thursday that Ukraine would still likely be able to export most of its wheat, corn, barley and sunflower seeds through alternative routes. But this would put additional pressure on ports on the Danube River, which flows from Germany’s Black Forest to the Black Sea, and make transportation costs more expensive, and rail infrastructure more vulnerable to Russian attack, the note said.

“High transportation costs mean that Ukrainian farmers may, potentially, reduce planting area in the future,” the note said.

Ukraine is one of the world’s leading exporters of grain and a leading global exporter of sunflower oil, and the agreement allowed Ukraine to resume exports of millions of tons of grain dropped after the invasion.

According to UN data, Ukraine has exported 32.9 million metric tons of grain and other agricultural products to 45 countries since the initiative began. Under the agreement, ships were allowed to pass through Russian naval vessels, which had blockaded Ukraine’s ports following Russia’s full-scale invasion.

Rising prices are expected to hit the world’s poorest the hardest. Ukraine supplied more than half of the World Food Program’s wheat grain sent to people in Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen last year, according to the United Nations.

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