Wheat prices surge further as Russia destroys Ukraine’s last remaining export route

Russia on July 24 destroyed Ukrainian grain warehouses on the Danube River; these were reportedly the last remaining export routes for grain supply for the war-ravaged nation.

The drone attack that left seven people wounded is a continuation of the air raid Russia launched last week after pulling out of the Black Sea grain deal. It comes amid a sharp rise in global wheat and corn futures.
As per the latest figures, wheat prices surge surged 6 percent (13% on the week), while corn prices have shot up 5 percent (10% on week) since the attack. According to European Stock Exchange figures, wheat prices rose 8.2 percent on July 20, while corn prices were up 5.4 percent.

The latest Russian attacks have primarily been targeting the seaports of Odesa, but the latest pre-dawn strikes destroyed infrastructure along the Danube, which is an alternative export route vital for Kyiv to ensure safe grain exports.. “The Russian terrorists have again attacked the Odesa region overnight. Port infrastructure on the Danube River is the target this time,” regional governor Oleh Kiper wrote on social media.

Per global media reports, three-grain warehouses have been destroyed in the Danube port city of Reni in the attack involving around 15 drones. Reni port, an important transport hub, looks across the Danube to NATO and European Union member Romania.
Since Russia’s full-scale invasion in February last year, Ukraine has expanded grain exports overland via the European Union to about one million tonnes a month, with large volumes being exported from Romanian ports and along the Danube.
These bombings are likely to make grain used for livestock harder to source besides affecting flours and oils that rely on Ukrainian grain. This can also adversely affect the current global food crisis in some countries that are already reeling under the effects of El Nino on agricultural production.

(With inputs from Reuters)
This article has been republished from Money control

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