Global wheat buyers face higher costs as Russia-Ukraine war halts Black Sea shipments

Global wheat buyers face sharply higher costs as they return to the market, with prices soaring due to the Russia-Ukraine war halting Black Sea shipments since July. Benchmark Chicago futures have climbed 40% from June lows to a three-and-a-half-year high, threatening food inflation for vulnerable consumers. Importers in Asia, the Middle East, and Africa have delayed purchases hoping for a Russia-Ukraine grain deal, but local supplies are running thin. Russian wheat exports are set to drop to about 1 million tons in September from 5 million last year, while Ukraine ships half its previous volume. Indonesia has received only 60,000 tons from the Black Sea this month, down from 500,000 tons last September, forcing millers to pay 20-25% more for Australian wheat. Egypt, the top global buyer, is diversifying to France and other suppliers, though its imports fell to 143,870 tons in early September from 876,139 tons a year ago. Some Egyptian mills operate at 30% capacity, waiting for prices to drop up to one-fifth if Black Sea shipping resumes. Competition for cargoes will intensify until the Southern Hemisphere harvest arrives at year-end.