Risk of renewed escalation pushes buyers from Black Sea to European wheat

The risk of renewed escalation in the Russia-Ukraine war is raising concerns about further disruptions to Black Sea grain shipments. Against this backdrop, some importers are already shifting purchases from Russian and Ukrainian wheat to EU origins. At the same time, December wheat futures on Euronext jumped 4% to €246.25/t, their highest since July 24, while Chicago wheat gained nearly 6%.

Further uncertainty was triggered by reports that Russia could intensify missile strikes on Ukraine. This has further weakened traders’ hopes for a quick return to stable grain shipments through the Black Sea.

The situation is compounded by problems with Russian port infrastructure. Repairs at NKHP, one of the three major grain terminals at Novorossiysk, could take up to four months following damage, further limiting prospects for a rapid recovery in Russian Black Sea grain shipments.

With risks remaining high, some buyers are already looking for alternatives to Black Sea grain. Bangladesh has purchased Bulgarian wheat and has also made inquiries for Romanian supplies. Concerns are also growing among importers in Egypt, although some buyers are still hoping for an improvement in the Black Sea situation.

Black Sea wheat nevertheless retains a substantial price advantage. Russian and Ukrainian 11.5% protein wheat for September shipment is offered at around $207–212/t FOB, compared with $271–274/t FOB for French wheat. However, growing logistics risks are prompting some importers to opt for more expensive European wheat in exchange for greater supply reliability.

Tags: wheat, Bangladesh, Ukraine, restrictions, Russia, war, Bulgaria, Egypt, export, Romania, prices, France, Black Sea region