Global wheat prices spike after Russia bombs Odesa grain port

Wheat prices are climbing again on global markets, triggered after Russia pulled out of an agreement that guaranteed safe passage for ships carrying cereals through the Black Sea and threatened further destruction upon any cargo ship attempting to leave Ukraine.

The latest development has led to biggest one-day jump in global wheat futures since Russia invaded Ukraine 17 months ago.

Earlier this week, Russia refused to extend a UN-brokered deal, which had been in place for the past year, allowing vital shipments of grain to leave Ukraine’s Odesa ports for international markets, including North Africa and the Middle East. It was reported Russia bombed the Odesa port today (20), destroying grain loading infrastructure and about 60,000 tonnes of grain stored at the port.

Russian has also warned that any ships sailing near Ukrainian ports would be “regarded as potential carriers of military cargo.”

European Union’s foreign policy chief today (20) has accused Russia of provoking a global food supply crisis.

“What we already know is that this is going to create a big and huge food crisis in the world,” Josep Borrell said before an EU foreign ministers’ meeting.

The UN secretary general, António Guterres, has previously warned that hundreds of millions of people would face hunger as a result.

Under the UN-brokered deal, grain prices had fallen by more than a third (35 per cent). It had been in place for just under a year in an attempt to alleviate a food crisis prompted by Russia’s blockade of Ukrainian ports that had prevented the transport of millions of tonnes of vital cereals.

Around the world, prices for other agricultural commodities such as rapeseed and sugar have also been climbing. Ukraine is a large producer of grains and oilseeds while both Russia and Ukraine have been the world’s one of the leading exporters of wheat.