Escalation in the Black Sea raises risks for global grain exports

Global grain and oilseed futures moved higher as renewed attacks on infrastructure in Ukraine and Russia heightened concerns over crop exports from the strategically important Black Sea region. Wheat prices rebounded after their sharpest weekly decline since August, as traders reassessed supply risks despite still-ample global stocks.

Russia intensified strikes on Ukrainian ports in the Odesa region, including Pivdennyi, the country’s largest port. Over the weekend, a shipping terminal owned by oilseed processor Allseeds was hit, according to Ukrainian officials. The company confirmed that its terminal came under attack on December 20, resulting in at least one fatality.

Allseeds reported extensive damage from the strike, including major fires, the destruction of thousands of tonnes of stored sunflower oil, and damage to critical infrastructure. Further attacks followed overnight, when another strike on Pivdennyi port set fire to 30 containers carrying flour and vegetable oil.

At the same time, Russia said a drone attack damaged infrastructure and vessels at the Black Sea port of Taman. Local authorities reported that two tankers and two piers were hit, along with a connecting pipeline and two storage tanks. The port handles a wide range of cargoes, including grain, fertilizers and oil, adding to concerns about regional export flows.

Ukraine and Russia are among the world’s leading exporters of grain and sunflower oil, and the renewed escalation threatens to slow shipment volumes. In response, Chicago wheat futures rose by as much as 0.8%, canola futures gained up to 2%, and palm oil prices in Kuala Lumpur also advanced on fears of tighter vegetable oil supplies.

In his daily address, Ukrainian President Volodymyr Zelenskiy said the country is closely monitoring the situation in the Odesa region, calling the attacks an attempt by Russia to block Ukraine’s maritime logistics. He urged the international community not to remain silent, warning that further escalation would pose serious risks to global food security.

Tags: wheat, war, Ukraine, Russia, prices