War and heat: Why are wheat prices soaring?
Summary
Wheat prices have gone up sharply because the war between Russia and Ukraine is disrupting exports from the Black Sea. At the same time, hotter and drier weather is reducing wheat production in places like South Africa, making it harder to grow and ship wheat globally.Key Facts
- Russia and Ukraine are important wheat producers and exporters, and fighting has damaged grain ports and ships.
- Russian and Ukrainian attacks have made shipping wheat from the Black Sea more difficult and expensive.
- Ukraine experienced 124 attacks on vessels and port facilities in July alone.
- Russian strikes have destroyed about 90% of Ukraine’s food transport logistics recently.
- Wheat prices reached their highest level in three years, with Chicago futures hitting $7.79 per bushel.
- South Africa’s wheat harvest is threatened by drought and high temperatures.
- Countries like Egypt and Indonesia rely heavily on wheat from Russia and Ukraine and are looking for new sources.
- Experts say there is enough wheat overall, but the cost and difficulty of moving it drives prices higher.
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