The price of grain continues to rise amid growing trade tensions in the Black Sea. Both Ukraine and Russia have issued mutual warnings, saying ships bound for their ports could be considered military targets.
This situation is Ukraine’s response to an earlier warning from Moscow, followed by a US intelligence alert revealing the presence of explosives in Ukrainian ports. The Black Sea represents a crucial exit for both countries’ agricultural commodities, and these warnings increase the risk of obstacles to global food trade, pushing prices higher.
Wheat futures have rallied more than 11% in the past three days, following Russia’s decision to terminate its wheat deal with Ukraine. This arrangement had favored the flow of trade for a time and was a rare example of Russian cooperation during the conflict. The collapse of this trade route will force world markets to use narrower and more cumbersome routes.