Grain market braces for price leap as Black Sea corridor halted

RUSSIA, UKRAINE: Wheat futures are expected to leap on Monday as Russia’s withdrawal from a Black Sea corridor agreement puts Ukrainian exports at risk, analysts said.

Moscow suspended its participation in the Black Sea deal on Saturday, in response to what it called a major Ukrainian drone attack on its fleet in Russian-annexed Crimea.

Kyiv said Russia was making an excuse for a prepared exit from the accord while Washington accused Moscow of weaponising food.

Wheat markets have been very sensitive to developments in Moscow’s eight month-old invasion of Ukraine, as both countries are among the world’s largest wheat exporters. Ukraine is also a major corn supplier.

The establishment of the corridor, which allowed over 9 million tonnes of grain and oilseed commodities to be shipped from Ukrainian ports, helped to steady grain markets and curb global prices after they hit record levels.

That relative calm is likely to end when Chicago and Paris wheat, the world’s two most-active wheat futures contracts, start their trading week on Monday.

“Russia’s announcement is certainly bullish for prices and the start of the week is very likely to see prices climb, simply because less grain is going to come out of Ukraine,” Arthur Portier of consultancy Agritel said.

– THE INDIAN EXPRESS