Attacks on Black Sea shipping cut Russian and Ukrainian grain exports as wheat reaches a three-year high

Nearly two months of attacks by Russia and Ukraine on each other's ports and commercial vessels in the Black Sea and the Sea of Azov have reduced grain exports from both countries and driven wheat futures sharply higher. Russian strikes on Odesa's port facilities have disrupted Ukrainian shipments, while Ukrainian drones have constrained Russian loadings, and combined wheat exports from the two countries for the July to September harvest period are estimated at roughly half of last year's volume.

The effect is concentrated in importers without alternatives. Egypt, the world's largest wheat buyer, has not received Black Sea grain for about a month, and Ukraine is attempting to move crops out by rail and river at far higher cost per tonne. European milling wheat contracts have risen from roughly 205 to 210 euros a tonne to about 240 euros for the December delivery.

Europe's own harvest offers no offset. French producers say close to half of this year's maize crop is unusable after summer heatwaves and drought, and some cereal farmers are trialling sorghum, a crop from sub-Saharan Africa, as a hotter-climate substitute. Two separate shocks, one military and one climatic, are affecting the same balance sheet in the same season.

The pattern repeats the one in energy. A chokepoint closes, physical volumes reroute at higher cost, and the price is paid by import-dependent states with the least fiscal room to cushion it. Wheat and crude are now both trading with a conflict premium, and food and fuel together dominate the consumer price basket in exactly the countries least able to absorb either.