The news about the suspension of grain acceptance and export in the Black Sea ports of Ukraine led to a drop in domestic prices and an increase in quotes in Paris

Amidst the intensification of Russian attacks on port terminals and civilian ships in the Black Sea, international traders were forced to suspend grain acceptance, which caused a collapse in purchase prices in Ukraine and caused panic on the Paris stock exchange, where quotes rose by 2.2-6.9% yesterday.

Over the past week, the Russian Federation has stepped up attacks on Ukraine’s port infrastructure and damaged terminals in response to the Ukrainian Armed Forces’ intensive attacks on ships of the Russian shadow fleet in the Azov and Black Seas. On July 14-15, Russian UAVs hit at least three civilian vessels under foreign flags that were waiting or entering the ports of Odessa for loading via the sea corridor. The attack killed the captain of one of the vessels and two crew members, and many crew members were injured. Against this background, individual ships began to refuse to enter the Black Sea ports of Ukraine for loading, so some international companies announced a complete suspension of port terminals for purchasing and receiving grain, while others limited acceptance to reduce the risk of losses or are simply completing the loading of existing vessels.

Purchase prices for barley, wheat, and rapeseed in Ukrainian ports fell by 200-500 UAH/t per day, but domestic prices for rapeseed and sunflower fell the most - by 1,000 UAH/t, as processors export oil and meal mainly through ports.

The mutual maritime blockade of exports from both Ukraine and the Russian Federation led to a sharp speculative increase in quotes on Euronext in Paris.

Yesterday futures rose:

• September wheat futures - by 6.9% to €231.5/t or $265.4/t (+13% per week),
• August corn futures - by 2.2% to €245.2/t or $282/t (+5.4%),
• August rapeseed futures - by 3.5% to €541/t or $620/t (+5.4%).

The reduction in supplies from the Russian Federation and Ukraine may be offset by an increase in supplies of Romanian and Bulgarian grain, which is gradually becoming more expensive and will further increase in price against the backdrop of a sharp increase in quotations. This is partially offset by an increase in the cost of freight and insurance premiums upon arrival at Black Sea ports, so export prices in Ukraine will remain at the same levels. In addition, traders are now actively returning to the export routes developed in 2022-2023 through Romanian ports and across the western border, where the infrastructure for such exports has already been updated.