According to experts, the growth of quotations is mostly based on the emotional component.
The result of recent events in Ukraine within the framework of a special military operation has become big problems with electricity and water supply, as well as communications.
Against this background, there was an increase in world grain prices. In particular, wheat futures for December delivery rose 4.8%. The final cost was $9.23 per bushel.
This is not surprising: Russia and Ukraine jointly provide up to 1/3 of world grain exports. Including wheat, barley and corn.
The conflict between these countries has the most negative impact on market expectations. First of all, the fate of the so-called «grain deal» causes concern.
How is the export of grain from Ukraine going?
When the conflict broke out in Ukraine in winter, many ships that were supposed to export grain from that country were stuck in ports for a long time.
Throughout the spring and much of the summer, uncertainty reigned as to their fate.
Finally, on July 22, the so-called “grain deal” was concluded in Istanbul: Russia, Ukraine and Turkey, with the participation of the UN, signed an agreement according to which the export of grain from Ukrainian ports will be carried out without hindrance.
In general, the mechanism works: for example, according to the statement of the Ministry of Infrastructure of Ukraine, on October 9, 13 more ships were sent from Ukraine, carrying 200,000 tons of grain.
And in total, for the entire period of the agreement, 6.8 million tons of grain were exported from Ukrainian ports on 305 ships, which went to the countries of Africa, Asia and Europe.
A significant part of this volume (almost half) is corn. However, a significant share and wheat: about 1.2 million tons.
Is price panic based on emotions?
As Vice-President of the Russian Grain Union Alexander Korbut noted, after yesterday’s events, prices are growing mainly emotionally, since nothing threatens the grain deal with a high probability.
“There was an “emotional” rise in wheat prices. It began amid fears of disruptions in grain supplies from the Russian Federation and Ukraine via the Black Sea.
The aggravation of the conflict calls into question the consent of both parties to the extension of the grain deal, which will be completed in about a month,” Korbut said.
In addition, in his opinion, even in the worst-case scenario — if the grain deal really fails — this will not greatly affect world grain prices, since the supply in the world is sufficient, and the volumes in Ukrainian ports are not critical.
As the expert noted, if all restrictions on the export of Russian grain are removed, this will make it possible to saturate the market to a high degree, regardless of how the further situation in the world develops.
