Russian Grain Lobby Warns Black Sea Attacks Could Disrupt Exports And Raise Global Food Prices

Russia’s main grain exporters’ group has warned that continued Ukrainian drone attacks on Russian ports and ships in the Black Sea could disrupt grain exports from the region, potentially increasing wheat prices and affecting food supplies in Africa and the Middle East.

Russia, the world’s largest wheat exporter, and Ukraine, another major agricultural exporter, have targeted each other’s agricultural export facilities and commercial vessels in the Black Sea in recent weeks.

The attacks have increased concerns over the future of grain shipments from the region and contributed to higher wheat prices.

The Union of Grain Exporters and Producers of Russia said the impact of the attacks could soon be felt by countries that depend on Black Sea grain supplies.

“Disruptions to shipping in the Black Sea caused by Ukrainian attacks on dry cargo vessels and port infrastructure pose a direct threat to global food security,” the group said in a statement to Reuters.

The union said grain importers had not yet experienced shortages because of existing stocks and the temporary availability of supplies from other exporters. However, it warned that the situation could affect many countries if disruptions continue.

An agricultural market source told Reuters on Thursday that a Ukrainian drone attack had caused “significant damage” to a major grain export terminal at Russia’s Port of Taman.

The Russian grain exporters’ group said Ukraine’s “systematic attacks”, which it said started in July, could eventually lead to a complete shutdown of export corridors in the Black Sea basin.

Ukraine’s largest farming union, UAC, has also raised concerns over Russian strikes near the southern port of Odesa, saying the attacks were restricting Ukrainian exports during the important harvest period and could affect global grain supplies.

Russia’s Defence Ministry said on Friday that its forces had struck 31 ships linked to the Ukrainian military in the past week. The ministry said the vessels included 23 cargo ships and four bulk carriers.

Ukrainian President Volodymyr Zelenskiy said Russian attacks on Black Sea shipping were threatening global food security and called on European partners to help address the issue.

A United Nations-brokered grain corridor established after Russia’s full-scale invasion of Ukraine in February 2022 had allowed Ukraine to export grain through the western Black Sea.

The corridor has effectively stopped operating in recent weeks due to Russian attacks, according to the source material.

A Ukrainian government source said last week that U.S. and Ukrainian officials were discussing the possibility of an air ceasefire as part of peace proposals to present to Russia. The Kremlin said it was too early to comment on those reports.

The Russian grain exporters’ group said the reduction in Russian wheat supplies to other countries this season could reach 30-35 million metric tons, which would represent around 15% of global wheat trade.

It said other exporting countries would not be able to fully replace the lost volumes if the disruption continues.

The group warned that a physical shortage of grain could lead to a prolonged global crisis. It also predicted that free-on-board wheat prices could rise to between $340 and $370 per ton, with the possibility of exceeding $400 if current conditions continue.

According to the group, countries in the Middle East and Africa are among those most exposed because they rely heavily on grain supplies from the Black Sea region.

It warned that higher wheat prices could make it difficult for some importing countries to maintain current purchase levels, which could reduce domestic consumption in poorer nations if the situation worsens.

References: Reuters