Russian strikes on the critical Black Sea ports of Greater Odesa have effectively ceased Ukraine's grain shipments. These ports typically manage about 90% of the nation's grain exports, but flows have nearly stopped just as the harvest season was in full swing, according to Bloomberg's Pyotr Kozlov.
The intensified attacks by Russia and Ukraine on Black Sea and Azov Sea ports and shipping over the past month have shut down more than 97% of the grain export capacity for both countries. This disruption has cut off a significant source of low-cost supplies, leading to a rise in global prices. Importers in the Middle East, Africa, and Asia are now facing the prospect of purchasing grain from more expensive suppliers like Australia and the United States.
Globally, wheat prices have increased by approximately 6.5% this month and are now roughly 30% higher than they were a year ago. Traders note that while large stockpiles have allowed importers to delay purchases, there's growing pressure to secure supplies due to the lack of de-escalation in the Black Sea region. Ukraine is currently attempting to export grain through rail links to Eastern Europe and via Danube river ports, with each accounting for about 45% of shipments, and road transport making up the remaining 10%.
Ukrainian officials anticipate that even with alternative routes, they will only be able to achieve 50% of their export potential if the Black Sea ports remain blocked. This situation has led to unsold grain piling up in Ukraine, impacting farmers like Ravil Dzhamally who returned to farming after Russian occupation and is now struggling to sell his harvest due to export disruptions.
