Russia’s potential invasion of Ukraine will be felt in a number of markets, from wheat and energy prices and sovereign dollar bonds to safe-haven assets.
ProAgro Group reports this, citing Reuters.
The agency notes that the region’s four main exporters – Ukraine, Russia, Kazakhstan and Romania – are unloading grain from Black Sea ports, and these shipments could be disrupted by any military action or sanctions.
According to the International Grain Council, Ukraine will become the world’s third-largest corn exporter and the fourth-largest wheat exporter in the 2021/22 season. Russia is the world’s largest wheat exporter.
Therefore, any disruption in grain shipments from the Black Sea region is likely to have a major impact on prices and accelerate food inflation at a time when food availability is a major problem worldwide following the economic damage caused by the COVID-19 pandemic, the agency said.
“Geopolitical risks in the Black Sea region have increased in recent months, which could affect future wheat prices,” confirmed Dominique Schneider, a strategist at Swiss financial firm UBS.
