Wheat prices rose sharply this week

Reading time: 3 minutes

Wheat prices rose sharply this week, despite the possibility of a resumption of Ukrainian grain exports by sea. But the world’s biggest grain importer, Egypt, recently canceled a significant shipment from Ukraine, so wheat prices rose by €3 at one point to €343 a tonne in Thursday’s trading. . Also, the value of the main corn contract increased by 4.50 euros, up to 357 euros per ton, thus surpassing the price of wheat for the first time after a long time, informs Agrointelligence.

According to sources in Cairo, Egypt recently terminated contracts for the supply of 240,000 tons of Ukrainian wheat, which were supposed to be delivered in February and March, but were not shipped due to the Russian invasion.

The General Authority for Supply (GASC), the Cairo-based state institution in charge of grain purchases, released the companies that were supposed to supply the grain from their contractual obligations, although the contracts did not include any force majeure clauses.

So, despite plans to reopen Ukrainian ports on the Black Sea, Egypt no longer expects to receive the grain purchased from Ukraine and appears to be now looking for other grain suppliers – such as Russia or France, Romania and Germany, according to an analysis published by agrarheute.com.

Egypt: About 85% of wheat imports came from Ukraine and Russia

Russia and Ukraine last week signed an agreement to resume grain and fertilizer exports from the Black Sea after shipments were paralyzed by hostilities.

It is currently unclear whether the contracts were canceled by the Egyptians before the Moscow-Kyiv deal was concluded.

Egypt, the world’s largest wheat importer, is heavily dependent on cheap grain from the Black Sea region, especially Ukraine and Russia. But, because of the war, the Arab country tried to find other suppliers, buying in July over a million tons of wheat through auctions and direct purchases (including from Romania).

Egyptian wheat imports, according to the USDA forecast, amounted to 11.5 million tons in the 2021/22 trading year, and US analysts expect imports of 11 million tons in the 2022/23 season.

Before the war, 85 percent of Egypt’s imported wheat came from Ukraine and Russia, according to AKP-Inform analysts.

Ships continue to be stuck in ports and there are not enough sailors

However, around 80 ships remain stuck in Ukrainian ports on the Black Sea. It appears that there is currently a shortage of personnel as many sailors were evacuated early in the conflict. At the end of February, in the first days of the war, about 2,000 sailors from around the world, on board 94 ships, were stuck in Ukrainian ports, reports Reuters.

According to the agreement, brokered by the UN, the first shipments of Ukrainian grain could, in theory, leave the neighboring country’s ports in the coming days. However, it is expected that few sailors will be willing to sail in the region until they see the safe passage of the first ships, which will be guided around the sea minefields.

Since the start of the war, seven merchant ships have been hit by missiles – two of which have sunk. International insurance companies have classified the entire region as a high-risk area, which translates into higher shipping costs.