Wheat prices rose on Thursday for the third day in a row amid worsening conflict between Russia and Ukraine
Wheat prices rose Thursday for the third straight day after Russia threatened to treat ships heading for Ukrainian ports as military cargo carriers, deepening fears of a global food security crisis, CNBC reports. Much of Ukraine's grain and food is exported to countries in Africa and the Middle East, hotnews.co.uk reports.
The rise in wheat prices was prompted by Monday's decision by the Kremlin to withdraw from the Black Sea Grain Initiative, a hugely important wartime agreement that provided a humanitarian sea corridor for Ukrainian grain exports, hotnews.ro reports.
The most actively traded wheat contract on the Chicago Board of Trade was trading up about 1.4% at 737.6 cents per bushel, hitting a three-week high. In the previous session, the contract had climbed 8.5%, the biggest daily gain in more than a year, amid rising geopolitical tensions. However, wheat prices remain well below peak levels of 1,177.5 cents per bushel reached in May last year.
UN chief António Guterres said he "deeply" regretted Russia's decision to end the initiative, which effectively ended a "lifeline" for hundreds of millions of people around the globe facing hunger as well as those already struggling with rising food costs. At the same time, EU foreign policy chief Josep Borrell said on Thursday that Russia's decision to withdraw from the pact would jeopardise global food security.
Russian forces have launched extensive missile and drone strikes against port and grain infrastructure in southern Ukraine in recent days. Ukraine's Ministry of Agriculture said on Wednesday that recent attacks on the port of Odessa in southern Ukraine and other towns have destroyed 60,000 tonnes of grain as well as crucial infrastructure.
The Institute for the Study of War, pointed out Wednesday that the recent attacks could reaffirm Russia's objections to renewing the Black Sea grain deal and hamper Kiev's ability to export agricultural goods. Western and Ukrainian officials have accused Russia of essentially attacking everyone who relies on Ukraine's grain exports and putting vulnerable people at risk.
Moscow has warned that from Thursday all ships sailing to Ukrainian ports will be considered "to be involved in the Ukrainian conflict on the side of the Kiev regime". Russian President Vladimir Putin said the country would immediately restore the international grain agreement if its demands are met. These include lifting restrictions limiting the full shipment of its own grain and fertiliser exports and ending sanctions against the Russian Agricultural Bank.
Russia suspended the agreement on grain exports through the Black Sea on 18 July. Signed in July 2022 in Istanbul the Black Sea Initiative between Russia and Ukraine, under the aegis of Turkey and the United Nations, allowed the export of some 33 million tonnes of grain from Ukraine despite the war.
