The increase in bread prices (unsplash photo)
Ships loaded with the wheat crop are leaving Ukraine as the United Nations and Turkey work to save a deal to keep exports flowing from the country, even after Russia announced over the weekend that it was suspending its involvement in the deal.
Wheat prices traded up 6.5% on Monday (31 October) as traders pointed to uncertainty about the outlook, while tensions rose in Ukraine as Russia launched a massive wave of missile attacks across the country. Ukraine is one of the world’s largest suppliers of wheat, corn and vegetable oil, and the agreement in July to open three Black Sea ports was essential to help ease a global food crisis.
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Israel also imports wheat from Ukraine, therefore a price increase if a ceiling can also reach the marketing chains. Russia’s announcement that it would indefinitely suspend involvement in the Turkey-UN brokered Safe Passage Agreement drew widespread condemnation from Ukraine and its allies, with US President Joe Biden warning it would increase hunger.
However, the UN announced late Sunday that it was holding discussions with all parties to the deal, and agreed with Turkey and Ukraine that ships carrying food would continue to leave Ukraine on Monday. Inspections at the coordination center in Istanbul will continue for both inbound and outbound ships, and there are also new ships scheduled to reach ports in Ukraine. Russian representatives have been informed, the UN said.
Wheat in Chicago earlier jumped 7.7% to $8.9325 at the open on Monday. Corn climbed 2.8 percent and soybean oil rose 3 percent. Crop traders have been focused for weeks on the looming Nov. 19 deadline for renewing the grain corridor agreement, especially as Russian officials have repeatedly criticized the deal, suggesting any extension would require tough negotiations.
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