Wheat Prices Rise Sharply Across The Globe; Reason Being Russia

Russia recently backed off from the Black Sea Grain Deal. The deal effectively allowed easy and safe export of grains and other goods from Ukraine ports. Since the time Russia has backed off from the deal, the Wheat prices are shooting on the upwards direction in the graph. It is affecting the entire world and most importantly European nations. Since, European nations regarded Ukraine as its ‘Bread Basket’.

World facing ‘Wheat Prices Rise’

On Wednesday, the wheat prices on the European stock exchange increased by almost 9% from the day before, reaching $284 per tonne. The biggest daily increase since the battle started in February of last year was seen in the US wheat futures, which increased by 8.5%. Similarly, the cost of maize increased by 5% to 4%.

Millions of tonnes of wheat that were destined for Africa and West Asia have been left stranded as a result of the embargo. According to Ukrainian President Volodymyr Zelensky, the Russian side has begun “deliberately targeting the grain deal infrastructure” while the wheat is still trapped.

US National Security Council says Russia’s decision will worsen the conditions

According to experts, the worldwide inflation that recently stabilized will be affected by the domino effect. “Russia’s decision to suspend participation in the Black Sea Grain Initiative will worsen food insecurity and harm millions of vulnerable people around the world,” said Adam Hodge, a spokesperson for the US National Security Council.

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Brief about the Black Sea Grain Deal

One of the greatest exporters of food grains, including wheat and maize, is Ukraine, which has contributed significantly to UN food aid initiatives. As a result, when Russia invaded and closed the ports of Ukraine, the price of food grains increased all over the world.

A deal reached by Turkey and the UN in July of last year eased a Russian naval blockade of Ukrainian cities along the Black Sea and established conditions for the transit of millions of tonnes of wheat and other goods from Ukraine’s full silos and ports.

Since then, Moscow has repeatedly postponed the deal’s expiration date by waiting until the very last minute to do so. However, it did so grudgingly because the Western countries had not complied with Vladimir Putin’s requests.

Moscow wanted its Russian Agricultural Bank (Rosselkhozbank), which had been disconnected from the SWIFT system because of sanctions imposed by the European Union in June 2022, to be reconnected before cancelling the arrangement on Monday.

In the meantime, Moscow has come under fire from the West for allegedly exploiting food items as well as gas to strengthen its position in the current battle.