Kyiv is the world’s fourth largest exporter of wheat and corn.
Cereal prices reached record levels on Thursday morning in the European market, with a completely new peak for wheat at 344 euros per tonne on Euronext, analysts and brokers told AFP. The prices of wheat and corn, of which Ukraine is the world’s fourth largest exporter, soared at the opening, a few hours after the start of the Russian invasion of Ukraine.
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The previous record for wheat dates back to November 24, 2021, which reached 313.5 euros per tonne in session on the December deadline (and November 23 for the closing price at 311.5 euros), indicated to AFP Edward de Saint-Denis, of the brokerage firm Plantureux et Associés. “Today we have exceeded this level, the price has reached a high of 344 euros“, he underlined. The price of wheat then deflated, while remaining at a very high level, around 320 euros per tonne for the March deadline.
The corn is flaming too
Without reaching these unprecedented levels, corn also saw its price soar, climbing to 304 euros per tonne (280 euros at the opening). On the European market, the previous record for corn dates back to August 4: the price had reached 320 euros at the close, recalled the analyst.
The consequences of the attack launched overnight by Russia are still difficult to predict for agricultural markets: “It’s totally unique“, underlined Sébastien Poncelet, of the firm Agritel. “When we see that there are explosions in Odessa, which is the first Ukrainian port, we assume that there will not be much grain to load today“, he observed.
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After the Russian invasion of Crimea in 2014,prices had increased by 15 to 20% on the markets, before deflating after 4 to 5 months“:”the fighting was essentially confined to the Donbass, which is not a large agricultural region, and the crisis remained centered on the Crimea. What we see today is on a whole different scale.“, he said.
“The war aggravates the problems of the agricultural sector”
The Italian agricultural confederation Coldiretti was alarmed on Thursday by the surge in wheat prices. Italy imports 64% of its wheat (for the production of bread and biscuits) and 53% of its maize (for breeding). Ukraine accounts for 20% of corn imports into Italy, and 5% of wheat imports. “The war aggravates the problems of the national agricultural sector already tested by the effects of price volatility while Italy is a country with a strong deficit in certain sectors.“, observed the president of Coldiretti, Ettore Prandini, in a press release.
For its part, France, the leading agricultural power in the European Union, has cereal stocks. French and American reserves could partly compensate for a drop in Ukrainian exports, according to analysts. The Elysée estimated Thursday that the crisis would havemore of an impact on world prices than our own supply“. Cereal prices have been very high since the summer of 2021 and the post-covid economic recovery: wheat, in particular, has never fallen below 250 euros per tonne in the short term since the end of September on the European market.
Around 1:00 p.m. on Euronext, a tonne of milling wheat rose by 49.50 euros on the March deadline to 336.5 euros, and by 40.75 on that of May to 334.75 euros, for nearly 70,000 lots traded. The ton of corn, for its part, gained 34.25 euros on the March deadline at 302 euros, and 24.50 euros on the June deadline at 290 euros, for more than 3,500 lots traded.