The price of wheat and corn has reached the maximum allowed level

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Wheat and corn price hikes on Thursday reached the maximum level allowed on the Chicago grain exchange after Russia’s attack on Ukraine called into question the deliveries of a major global grain supplier, Bloomberg reports.

Futures quotes for both cereals appreciated by more than 5% and were blocked at the maximum appreciation limit for over an hour. Wheat is at its highest level since 2012 and oil prices are also rising, fueling concerns that it will further stimulate global food inflation.

Around 8:26 a.m. GMT, at the Chicago Board of Trade, the price of wheat was up 5.7% to $ 9.3475 a bushel, with a maximum of 50 cents above the closing price of the previous session.

Ukraine and Russia account for more than a quarter of world wheat trade, a fifth of world corn sales and 80% of sunflower oil exports.

Russian President Vladimir Putin on Thursday announced in a surprise televised speech a military operation in Ukraine to defend separatists in the east of the country, triggering the worst security crisis Europe has faced in decades. According to Itar Tass, Russia has suspended, until further notice, the movement of merchant ships in the Sea of ​​Azov, where some of Ukraine’s grain is exported. However, operations at Black Sea ports continue.

“Markets have panicked this morning,” said French consulting firm Agritel.

Large grain importers are particularly vulnerable, as Ukraine and Russia supply many countries in Asia, the Middle East and Africa. Market attention will be drawn to a wheat tender to be held in Egypt on Thursday, the world’s largest importer. Agritel states that so far Egypt has been flooded with offers of wheat from the Black Sea basin, but in the current context it is unclear which suppliers will participate in Thursday’s auction.

In addition to the crisis in Ukraine, the situation is exacerbated by the drought in South America, which has worsened the outlook for soybean deliveries, with futures prices hitting their highest level in nine years. Quotation of palm oil is also at an all-time high due to labor shortages that limit production in Malaysia, one of the main producers.

All of these increases could affect shelf prices, as a wide range of products from pasta to chocolate will become more expensive, further affecting household budgets. This is in line with the fact that in January an indicator of world food prices calculated by the United Nations approached a record level.