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    Food prices to rocket as Russia pulls out of grain export deal

    A combine harvests wheat in a field near the village of Zghurivka in Kyiv region, Ukraine August 9, 2022. REUTERS/Viacheslav Musiienko/File Photo

    Wheat and corn futures soared on world markets after Russia pulled out of a deal to allow grain exports from Ukraine through the Black Sea, threatening to push global food prices even higher and to exacerbate the world food crisis. 

    The United Nations had brokered a deal in July to allow Russia to export Ukraine’s grain and fertilizer through ports in the Black Sea, in a bid to ease global food price inflation. Russia on Saturday (29) suspended this agreement after what it called a “massive” drone attack on its Black Sea Fleet in Sevastopol, Crimea, saying it could not guarantee the safety of civilian cargo ships participating in the ‘Black Sea Initiative’. 

    The International Rescue Committee warned of the “catastrophic consequences of Russia suspending its participation” in a deal that was thrashed out in Istanbul this summer. 

    The most-traded wheat contract on the Chicago Board of Trade jumped as much as 7.7 per cent to $8.93 a bushel at the open on Monday (31), the highest since 14 October, and later traded at $8.79. Corn prices rose as much as 2.8 per cent to $7 a bushel and soybean oil gained 3 per cent, reports stated.

    Ukraine is often referred to as the ‘breadbasket of Europe’ because of its high market share of exports of wheat, corn, and grain. Its exclusion from world food markets by Russia will drive up prices and increase the risk of famine in the developing world, analysts warned. 

    Global leaders also condemned Russia’s latest move. 

    US president Joe Biden said its withdrawal was “purely outrageous” and likely to increase starvation rates, while Ukrainian president Volodymyr Zelenskyy called for Russia to be expelled from the G20 group of countries. 

    “This is a completely transparent attempt by Russia to return to the threat of large-scale famine for Africa, for Asia,” Zelenskyy said in a video address Saturday. 

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