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Corn and Wheat Prices Climb Following Russia’s Withdrawal from Grain Export Deal

Following Russia’s revocation of the grain export deal, wheat and corn prices on the global commodities market substantially increased.

The agreement permitted grain exports from Ukraine to other nations through the Black Sea. The ongoing war between Russia and Ukraine did not stop it from operating. However, in an unexpected move, Russia backtracked on the agreement, disrupting Ukraine’s pivotal exports of grain and wheat.

According to the Chicago Board of Trade, wheat prices may rise by 5.5% to $8.74 per bushel. Likewise, corn could rise in cost per bushel by 2.3% to $6.96 during this time. Malaysia may additionally be impacted by the new arrangement, with a consequent increase in palm oil prices.

“Taking into account the act of terrorism committed by the Kyiv regime with the participation of British experts on October 29 this year against the ships of the Black Sea Fleet and civil vessels involved in the security of the ‘grain corridor,’ the Russian side suspends its participation in the implementation of the agreements on the export of agricultural products from the Ukrainian ports,” said the Russian defense ministry.

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An intervention from the international community

Stephane Dujarric, the UN spokesman, said, “We’ve seen the reports from the Russian Federation regarding the suspension of their participation in the Black Sea Grain Initiative following an attack on the Russian Black Sea Fleet. We are in touch with the Russian authorities on this matter.”

According to the World Food Program, global hunger would result from the crisis. The group claims that many individuals will be harmed if Russia continues to use food as a weapon in its invasion. Senior Western officials quickly expressed their contempt for the way Russia conducts its conflict with Ukraine.

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The effect on global grain supply

According to agricultural data company Gro Intelligence, more than a third of the world’s wheat exports come from Russia and Ukraine combined. In addition, the nations are also the top exporters of barley, rapeseed oil, sunflower oil, and maize to the world. Therefore, excluding the two nations from the scenario means denying these products to the global market, ultimately influencing the supply chain.

Russia axed the agreement following an alleged Ukrainian drone attack on its Black Sea Fleet. Ukraine refuted the accusation, claiming that Russia had eroded its own forces to find an excuse to call off the agreement. And apply added strain to the nearby Ukrainian forces.

According to the International Rescue Committee, Russia’s retreat from the grain agreement would be disastrous for poor nations. The condition makes the extreme hunger that already exists in these nations worse.

“We underline the urgency of doing so to contribute to food security across the world and to cushion the suffering that this global cost-of-living crisis is inflicting on billions of people,” said UN Secretary-General Antonio Guterres.