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10 Oct, 2022 14:48

Wheat prices rise sharply on Ukraine deal fears – Bloomberg

Monday’s Russian strikes on the country have left experts worried
Wheat prices rise sharply on Ukraine deal fears – Bloomberg

Wheat prices jumped nearly 8% on Monday on news of explosions in the Ukrainian capital and other cities, trading data shows. According to analysts who spoke to Bloomberg, the rising prices are due to the escalation in the conflict between Moscow and Kiev, which has placed the Ukraine grain deal, due to expire in about a month, in jeopardy.

The beginning of the week could be very nervous with the risk of increased tensions in the Black Sea basin,” Paris-based analytics firm Agritel told Bloomberg in a note.

Chicago wheat futures rose to $9.48 a bushel around 16:00 GMT, a 7.7% increase. Other grains, including corn and soybeans, also rose.

Overall, wheat prices have so far surged 19% year-on-year.

The missile strikes on various cities across Ukraine, including Odessa, one of Ukraine’s largest grain export hubs, came two days after an attack on the Crimean Bridge, a key link between mainland Russia and the Crimea Peninsula. Moscow has blamed the blast on Ukraine.

According to analysts, any impediment to Black Sea grain exports would propel global prices for food staples higher.

The UN-brokered deal to allow Ukrainian grain, which was blocked due to military operations, to leave Black Sea ports was reached between Russia, Ukraine, and Turkey in late July. As of early October, around 4.6 million tons of agricultural products were exported from Ukrainian ports as part of the agreement. Nearly half of these exports were corn, while wheat exports amounted to 1.2 million tons. Prior to the deal, President Vladimir Zelensky said that Ukrainian ports held 20-25 million tons of agricultural products for export.

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