Prices for Wheat Increased by 9% Following Russia's Threats to Attack Ships Carrying Grain
Wheat futures in Chicago surged by 9% after the Russian Federation declared its intention to target vessels approaching Ukrainian borders as military objectives.
This was reported by Bloomberg.
The Russian Ministry of Defense stated that they would strike ships in close proximity to Ukrainian ports, deeming them as vessels transporting military cargo.
"As of 00:00 Moscow time on July 20, all ships heading through the Black Sea to Ukrainian ports will be regarded as potential carriers of military cargo. The countries of the flagged vessels will be considered involved in the Ukrainian conflict on the side of the Kyiv regime," Russian media reported.
This statement has shaken the markets, as the potential increase in military risks and the blockade of Ukrainian grain supplies led to price hikes.
"We considered the continuation of the grain deal unlikely, but this escalation follows a series of previous escalations," said Michael Magdovitz, a senior analyst at London's Rabobank.
It is important to note that previously, the Kremlin announced its withdrawal from the grain deal, which partially allowed the resumption of Ukrainian grain exports, halted due to Russia's illegal blockade of Ukrainian ports. Russia's policy is expected to exacerbate the world's food crisis. International leaders sharply condemned the Kremlin's actions.
"Russia refuses to continue [the deal] and withdraws 23 million tons of Ukrainian food from the world markets next year. Let's be candid - Russia's actions take food away from the mouths of the poorest people in Africa, the Middle East, and Latin America. We cannot allow the war to continue for another 500 days," said James Cleverly, Secretary of State for Foreign, Commonwealth and Development Affairs of the United Kingdom.
Immediately after the announcement of the withdrawal from the deal, Russia resumed targeted missile strikes on Ukrainian ports and elevators, attempting to demolish Ukrainian infrastructure for storing and transporting grain, as well as the accumulated crops.
"Nighttime strikes disabled a significant part of the grain export infrastructure at the Port of Chornomorsk. According to specialists' estimates, it will take at least a year to fully restore the damaged facilities," the Ministry of Agrarian Policy and Food of Ukraine stated.
The Ministry also reported that the recent Russian attack resulted in the destruction of 60 thousand tons of grain that was scheduled to be loaded onto a ship and leave the Ukrainian port 60 days ago.