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Wheat prices rise sharply after Russian attacks on Ukrainian port infrastructure

by Liliane Bivings and The Kyiv Independent news desk July 26, 2023 2:19 AM 2 min read
Sunlight coming through shrapnel holes in the roof over piles of barley three days after five Russian missiles struck a grain storage facility in the village of Pavlivka, Odesa Oblast on July 24, 2023. (Photo by Scott Peterson/Getty Images)
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Wheat and corn prices have risen sharply after a barrage of Russian attacks on Ukrainian ports and grain infrastructure that have followed the collapse of the Black Sea Grain Initiative.

A Russian drone attack overnight on July 24 on the Danube River port of Izmail and Reni, located in Odesa Oblast a mere 200 meters from the Romanian border damaged grain storage units and injured several.

About a week earlier, a series of consecutive Russian attacks on port infrastructure in Odesa Oblast destroyed a reported 60,000 tons of grain and damaged loading equipment.

Wheat futures on the Chicago Board of Trade soared 8.6% to $7.575 per bushel on July 24, while corn futures jumped 4.7% to $5.68 per bushel.

On July 25, wheat futures rose to a five-month high, reaching $7.77 per bushel, its highest since Feb. 21, Reuters reported. Corn prices increased by 0.1% to $5.69 a bushel.

While wheat prices have stabilized and remain below their peak of $13 per bushel following the start of Russia's full-scale invasion in February 2022, the recent price fluctuations reveal the effect that Russia's war continues to have on global markets, Texas A&M AgriLife reported, citing grain economist Mark Welch.

Traders are likely worried about a tightening supply following the attacks on port infrastructure and the collapse of the Black Sea Grain Initiative after Russia refused to renew the deal, CNN reported.

The grain deal, brokered by Turkey and the United Nations and signed by Ukraine and Russia in July of last year, had allowed for the safe export of grain from Ukraine's ports. Nearly 33 million metric tons of food were exported through Ukrainian ports while the initiative was in force, according the the U.N.

The ports of Izmail and Reni are two of the last ports that have remained operational in Ukraine since the start of the full-scale invasion. The Danube River ports are now one of the only viable grain export routes for Ukraine since Russia pulled out of the grain deal.

Ukrainian grain exports are vital to the world’s food supply. Before the war, Ukraine's wheat exports accounted for 10% of the world's exports, making it the fifth-largest wheat exporter globally, according to the Organization for Economic Cooperation and Development.

Romanian President Klaus Iohannis condemned Russia's attacks on Ukraine's Danube ports, saying that "this recent escalation poses serious risks to the security in the Black Sea."

This Week in Ukraine Ep. 17 – Black Sea grain deal is dead. What can Ukraine do?
Episode #17 of our weekly video podcast “This Week in Ukraine” is dedicated to the Black Sea grain deal, how Russia weaponized it, and ultimately killed it. Host Anastasiia Lapatina is joined by the Kyiv Independent’s reporter Alexander Query. Listen to the audio version of the podcast on Apple, S…
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