At the prospect of Ukraine-Russia conflict, concerns over wheat exports from the two major suppliers have shot up the price of grains, Bloomberg reported. Wheat prices have climbed 1.7 per cent in Chicago following on from a 5.3 per cent increase last week, yet the value remains below November’s 7 per cent peak.
With Putin accusing the US of failure to meet demands, the White House is warning an invasion may be near as tensions between Ukraine and Russia are mounting.
The threat of war between both countries poses a risk on international grain markets, as both nations account for almost a third of wheat and barley exports and a fifth of corn trade, according to Bloomberg. This could lead to an increase of these commodities prices and add to already high food costs.
On a regional level, the conflict is spurring “uncertainty” in Egypt’s wheat market, Alarabiya reported citing minister of supply and internal trade Ali Moselhy, adding that the government is currently working on protective measures.
Egypt, as the world’s largest wheat importer, will have its market impacted if war does break out, leading to disruption to the flow of grain, causing a price surge.
Soybeans fell from 9-month highs seen last week as traders awaited more news about the impact on trade flows of dry weather which is expected to reduce crops in South America. Corn also fell. The market still has a strong focus on the South American crop problems, but is awaiting more news to maintain the upward momentum, especially about actual soybean export demand shifts to the United States. The political tension between Russia and Ukraine is supporting the wheat market, with great uncertainty as the political developments are becoming harder to analyse.