As the prospect of a Ukraine-Russia conflict draws closer, concerns over wheat exports from the two major suppliers have shot up the price of grains, Bloomberg reported.
Wheat prices have climbed 1.7 percent in Chicago following on from a 5.3 percent increase last week, yet the value remains below November’s 7 percent peak.
With Putin accusing the US of failing to meet demands, the White House is warning an invasion may be near as tensions between Ukraine and Russia are mounting.
The threat of war between both countries poses a risk on international grain markets, as both nations account for almost a third of wheat and barley exports and a fifth of the corn trade, according to Bloomberg.
This could lead to an increase in these commodities’ prices and add to already high food costs.
On a regional level, the conflict is spurring “uncertainty” in Egypt’s wheat market, Alarabiya reported citing minister of supply and internal trade Ali Moselhy, adding that the government is currently working on protective measures.
Egypt, as the world’s largest wheat importer, will have its market impacted if war does break out, leading to disruption to the flow of grain, causing a price surge.
Egypt, shipped around 50% of its wheat purchases from Russia last year and around 30% from Ukraine, according to data from two regional traders.
Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), has worked on diversifying its wheat sourcing, recently approving Latvian wheat as a new import origin in November.
Wheat Long (Buy)
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