Wheat prices rise after Odesa missile raises doubts over grain exports from Ukraine

Wheat prices rise after Odesa missile raises doubts over grain exports from Ukraine

Global wheat prices jumped after Russia’s weekend attack on the seaport of Odesa, even as Ukraine indicated it is pushing ahead with a deal to begin shipping millions of tons of grain that has been piling up since the invasion.

Friday’s agreement involving Russia and Ukraine aims to facilitate exports from three of Ukraine’s Black Sea ports, including Odesa, and was hailed as a vital step toward alleviating a global food crisis.

Ukrainian officials are still preparing to restart sea exports as soon as this week despite the attack. The assault serves as a stark reminder of the risks for shippers and insurers as Russia’s war rages on.

“The willingness of ship owners to come with their ships to our ports will be the crucial factor to recover export volumes from Ukraine,” Roman Slaston, director general of the Ukrainian Agribusiness Club, said. Farmers “have some cautious optimism about this deal, but they also understand that any time it might stop again.”

Chicago wheat futures surged as much as 4.6%. Prices had slumped almost 6% Friday and closed at the lowest since early February after the deal was signed in Istanbul. Some analysts remain sceptical of the timeframe for exports resuming.

“It is thought to be unlikely that much will move from Ukraine right away as the infrastructure internally and at the ports needs to be rebuilt,” Jack Scoville, an analyst at Price Futures Group in Chicago, said.

Ukraine said at the weekend that the missiles didn’t hit grain storage at the port. Russia said on Monday its missile strike on Odesa targeted a military area and wouldn’t affect plans to resume grain exports from the Black Sea port.

“The attack on Odesa last Saturday is raising doubts about the resumption of the port activity in appropriate conditions,” Agritel said. “The market will inevitably remain very nervous in the event of new bombings or doubts about the concrete implementation of this resumption of export activity.”

Ukraine is moving ahead for now with preparations and its government is under pressure to restart grain exports to support its economy, which has been devastated by the war. The infrastructure ministry said Kyiv is beginning to prepare the Odesa, Chornomorsk and Pivdennyi ports to resume work and published a call for ships willing to take part in grain export caravans.