Black Sea grain exports collapse, wheat hits daily limit

Renewed fighting in the Black Sea region has virtually halted grain exports from Russia and Ukraine, which together supply nearly a third of global wheat trade. Combined exports from the two countries may fall to about 2.5 million tonnes in August, down from 6.3 million tonnes a year earlier, according to data firm Kpler. Wheat futures on the Chicago Board of Trade hit the daily 45-cent limit on Wednesday, reaching $7.48-1/4 per bushel, the highest level in years.

The escalation follows tit-for-tat strikes on port infrastructure and merchant vessels. Ukrainian drones have closed the Sea of Azov to Russian shipping, and Kyiv badly damaged grain terminals at Russia's Novorossiysk port, the world's largest wheat-export hub. Russia is now reported to be considering stepping up ballistic missile strikes on Kyiv. Analysts say the disruption to Black Sea agricultural exports is the worst since the region became a major food trade route.

India faces higher import costs for sunflower oil and yellow peas in particular. Sunflower oil imports may fall to 180,000 tonnes in August from the usual 300,000 tonnes. Freight costs and insurance premiums are rising, and alternative routes via the Danube and Baltic seas have limited capacity. Meanwhile, US sanctions on Iran threaten India's basmati exports to Tehran, a market worth about 1 million tonnes annually.