Wheat costs have risen sharply amid disruptions to Black Sea exports because the Russia-Ukraine warfare continues and as altering climate patterns trigger droughts which have sharply decreased manufacturing.
Over the previous month, Russia and Ukraine have stepped up assaults on one another’s grain terminals on the Black Sea. With Russia the world’s largest wheat exporter, and Ukraine among the many prime 10 grain-producing international locations, these assaults have taken their toll on international wheat and grain provide.
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Chicago wheat futures, the worldwide benchmark for the grain market, hit a three-year excessive on Friday, earlier than nudging down 0.54 % on Monday to $7.79 per bushel by 02:00 GMT. Authorities in Russia’s Rostov area known as a state of emergency on Friday after asserting that port closures and navigation disruptions within the Sea of Azov and Black Sea basin have led to a pile-up of agricultural merchandise at farms.
In the meantime, the rising temperatures and lack of rain have threatened to chop this 12 months’s wheat harvest in South Africa’s Swartland, which produces about 20 % of the nation’s wheat.
Right here’s what we all know:
What influence is the Russia-Ukraine warfare having on costs?
Over the previous month, strikes on ports, vessels and grain services amid the Russia-Ukraine battle have disrupted grain terminals and compelled shippers to delay or cancel cargo loadings throughout the peak export season.
Whereas Russian missile assaults have impacted Ukraine’s grain exports, Ukraine’s drone assaults within the Sea of Azov have additionally sharply curtailed Russian shipments of each grain and wheat. On the similar time, assaults on Russia’s Novorossiysk and Taman ports have elevated transport prices out of its Black Sea ports.
In line with Ukraine’s Ministry of Infrastructure, in July, Ukraine suffered 35 Russian assaults on vessels in port, 22 at sea and 67 on port services. By comparability, the entire variety of vessel strikes for the entire of 2025 was simply 14.
On Friday, Kyiv’s agricultural minister stated current Russian air assaults have destroyed round 90 % of outlets’ meals logistics. With transport of wheat curtailed, costs have risen, elevating fears of meals insecurity all over the world.
Joe Glauber, a analysis fellow emeritus within the director common’s workplace on the Worldwide Meals Coverage Analysis Institute, stated that the difficulty, subsequently, is much less the quantity of wheat being produced and extra about the price of getting it to consumers and customers.
“There’s loads of wheat in Russia and Ukraine, and finally that wheat will make it out on to the market. However proper now it may’t, or it comes out with a really excessive value, and so wheat costs have mirrored that,” he instructed Al Jazeera.
“There’s a variety of wheat on the earth…it’s not a query of availability, it’s a query of affordability,” he added.
Egypt, the world’s largest wheat importer, often spends round $3bn per 12 months on importing wheat. Within the first half of 2026, it sourced greater than 82 % of its inventory from Russia and Ukraine.
In Asia, second-largest wheat importer Indonesia purchased $361m of wheat from Ukraine and $102m from Russia between 2023 and 2024, in line with the Observatory of Financial Complexity. Indonesia often sources between 15 % and 20 % of its wheat from the 2 international locations.
An official at Indonesia’s Flour Millers’ Affiliation instructed Reuters final week that present shares can meet instant food-grade wheat necessities. “However we don’t have ample or extra provide. We have now to have a look at different origins equivalent to Bulgaria, Australia, Romania and Argentina for cargoes that don’t get shipped from Russia and Ukraine,” the official stated.
How does local weather change match into this?
In addition to the warfare in Ukraine, droughts and drier climate patterns have taken a toll on wheat manufacturing and contributed to rising costs.
In line with the US Division of Agriculture (USDA), as of July 1, the US, additionally one of many largest wheat exporters, is forecast to yield “46.7 bushels per acre, down 0.1 bushels from final month and down 8.2 bushels from final 12 months’s common yield of 54.9 bushels per acre”.
“If realised, the US yield can be the bottom since 2015,” the USDA stated.
In a report up to date on August 14, the division wrote: “This 12 months’s small crop is a product of long-term decline in US wheat acreage and widespread drought impacts on HRW [Hard Red Winter wheat] manufacturing within the Nice Plains States. Complete wheat provides are forecast down 13 % from the earlier 12 months, with bigger starting shares dampening the impact of the smaller crop.”
For Canada, the world’s sixth-largest wheat producer, the USDA’s Overseas Agricultural Service discovered that for the 2026-2027 manufacturing 12 months, whole manufacturing is forecast to be 34.6 million metric tons (MMT) – additionally 13 % decrease than the 12 months earlier than – attributable to decreased planted space and a return to lower-than-average yields.
Amid the heatwaves which have hit European international locations over the previous three months, wheat manufacturing within the bloc has additionally decreased. In line with COCERAL, the European affiliation of commerce in cereals, oilseeds, rice, pulses, olive oil, oils and fat, animal feed and agrosupply, the extreme warmth is anticipated to cut back grain crops in 2026 by round 9 million tonnes to 286 million tonnes.
In a report revealed in July, COCERAL stated: “The climate has began to have an effect on corn pollination within the southern half of France and in Hungary. Extra injury is anticipated from the forecast warmth in different elements of the EU.”
The El Nino climate sample can also be anticipated to deliver drier-than-usual circumstances to the Southern Hemisphere this 12 months, with South Africa and Australia anticipated to expertise droughts consequently.
What will be finished to mitigate all this?
Whereas the Russia-Ukraine warfare continues, in July 2022, the 12 months the warfare began, a Black Sea Grain Initiative was brokered to permit for the protected exports of grain, meals and fertiliser from Ukrainian ports to stabilise and decrease international meals costs.
Whereas that settlement held, greater than 1,000 ships filled with grain and different foodstuffs left Ukraine, in line with the EU. Nevertheless, Russia ended the settlement in July 2023.
The reply to the present disaster is way from straightforward, consultants say.
Bringing costs down now would necessitate a serious shift in warfare technique by each Russia and Ukraine, whereas the influence of local weather change could possibly be mitigated by governments implementing insurance policies together with enhancing water administration on farms by means of using reservoirs to help drought-affected crops and scale back the lack of manufacturing.
Furthermore, Glauber defined, whereas various routes exist to ship out grain from Russia and Ukraine, they’re pricey, including {that a} return to a potential Black Sea Grain Initiative “would assist calm wheat markets so much”.
One reply could also be for different international locations to step in.
In line with Glauber, throughout the 2022 international grain value surge, different wheat producing international locations equivalent to India exported extra to make up for shortages.
“India, for instance, had file exports in 2022. It’s most likely much less probably this 12 months, simply due to El Nino and different different elements affecting them, however they may additionally present extra wheat. I feel the world wheat market proved very resilient in 2022, and I anticipate we’ll see the identical in in 2026,” he stated.
