One of the primary difficulties the rest of the world faces from the Russia-Ukraine war is supply chain difficulties. Primarily, that comes in the realm of commodities, for all three major categories in agricultures, metals, and energies. Currently, the wheat supply is contentious, as western countries eye new sanctions because of civilian killings in Bucha. Wheat was up 2% on Tuesday as supply over the Black Sea was cut down.
Chicago Board of Trade’s most-active wheat contract rose to $10.38 per bushel at one point. That’s the highest it’s been since March 30th, and indicates similar movement for other agricultures. Percentage-wise that translates to a 2.8% jump. Soybeans on the same exchange also inclined, although not as steeply, jumping 0.4% to $16.09 for a bushel. Corn upscaled similarly, going to $7.54 a bushel with 0.5% expansion.
Analysts predict this to be only the beginning of future difficulties. Logistical issues along with land destruction may cause irreparable damage to global markets. Alternatively, production centers could shift elsewhere, although that also has specific price implications for transport and growing.
Ukraine was the fourth most prominent grain seller for the 2020/21 season. It ships its supply over the Black Sea, which is currently impossible due to Russian force blockades. Russia, on the other hand, is the world’s larger exporter of wheat, with the main buyers being Egypt and Turkey. However, Russian wheat demand is lower due to a combination of reasons, including sanctions.
Meanwhile, those with unmet wheat demands are eyeing Asia for their new supplier. Namely, as the fiscal year wraps up, India reports an ATH in wheat exports. As such, India resents an attractive workaround to a potential supply shortage that may affect the entire globe. But even with the slight fixes, experts akre predicting a sweeping increase in commodity prices.
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