Global grain prices increased after Russia attacked Ukraine’s Port of Izmail across the Danube River from Romania August 2.
The attacks destroyed multiple buildings and stopped ships from docking in the port, preventing Ukrainian grain being shipped down the Danube River and out through the Black Sea. Ukrainian Deputy Prime Minister Oleksandr Kubrakov said the drone strikes damaged roughly 40,000 tons of grain that were destined for China, Africa and Israel — approximately one shipload. The disruption to shipping, however, is significant.
Chicago wheat prices grew by almost 5% on the morning of August 2 due to supply concerns following the attack, according to Reuters,
RIA, a Russian state news outlet, said the damaged port and grain infrastructure was housing military hardware and foreign mercenaries. However, RIA did not provide any evidence to back up this claim, and Reuters could not verify the report.
“Ukraine wants to show the world that Russia is using food as a weapon in this war,” said Joanna Kakissis, an international correspondent for NPR, during an August 3 episode of the Up First Podcast.
The Danube River has become incredibly important for Ukraine after Russia attacked the Port of Odesa, because it allows the country to transport grain via the Black Sea with safe passage along the coasts of Bulgaria and Romania, which are members of the European Union, and Moldova, which joined the North Atlantic Cooperation Council
in 1992, and is officially neutral.
On August 2, the EU warned developing countries that Russia would begin offering cheap grain as a way to create new dependencies stemming from “economic vulnerabilities and global food insecurity,” according to a letter seen by Reuters. Russia remains the number one exporter of wheat, with Ukraine occupying the number seven spot. Between them, they account for more than a quarter of the world’s exported wheat.
For ocean carriers looking for a way to bring Ukrainian grain to global markets, the options keep dwindling, escalating a trade crisis that is expected to add pressure on global food prices, The New York Times said.
Global markets have adequate supplies of grain because of robust harvests in Brazil and Australia, but a prolonged shortage of exports from Ukraine is likely to make prices more volatile in the case of extreme weather events. Russia stepped up the attacks on Ukraine after India, a top producer of rice, halted exports of non-basmati white rice July 21, because extreme weather had hurt production, causing domestic prices to jump.
The grain hangar and port attacks began after the Russian government announced July 17 it was backing out of a wartime trade deal that allowed Ukraine to send grain exports to other countries in the Middle East, Africa and Asia via the Black Sea. The agreement, which was created to limit global food shortages caused by Russia’s war in Ukraine, has allowed over 32 million metric tons of grain to be transported to the rest of the world since the conflict began in 2022.
