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Food prices in the global market may rise further as the conflict between Russia and Ukraine intensifies in the Black Sea, disrupting vital grain exports. The United Nations Food and Agriculture Organization (FAO) said on Friday that global food prices have already reached their highest level in more than three and a half years.
The FAO Food Price Index averaged ”133.3 points in August”, its highest level since November 2022.
The Black Sea has become increasingly dangerous for commercial shipping as Russia and Ukraine continue attacks on each other’s vessels and port infrastructure. According to Turkey’s maritime workers’ union, 23 people were killed in attacks on 35 ships in the Black Sea in July—the highest number of sailor deaths in a single month since the war began.
Attacks continued in August, raising concerns over the safety of major international shipping routes. The head of the International Maritime Organization (IMO) has also expressed concern about the deterioration of maritime security worldwide.
Russia has repeatedly attacked Ukraine’s major grain-exporting ports, including Odesa and Chornomorsk. Ukraine, meanwhile, has launched drone attacks on Russian vessels, including tankers that Kyiv says are part of Russia’s so-called “shadow fleet,” which is used to transport Russian oil while circumventing sanctions.
Ukraine has also targeted the Russian port of Novorossiysk, a major hub for both oil and grain exports.
The growing instability has already disrupted grain exports from both Russia and Ukraine, putting additional pressure on global food prices. Countries that depend heavily on imports of wheat, barley and corn are likely to be particularly vulnerable.
## Russia and Ukraine Remain Major Grain Exporters
Russia is the world’s largest grain exporter, with a significant share of its exports going to countries in the Middle East and North Africa, including Turkey and Egypt. Ukraine is also among the world’s leading grain exporters.
Following a series of Ukrainian drone attacks in July, Russia temporarily halted shipping in the Sea of Azov and later used alternative routes, including through the Caspian and Baltic seas and the Pacific Ocean.
According to Oxford Economics, more than ”70pc of Russia’s maritime grain exports pass through Black Sea ports”, while another roughly ”20pc goes through the Sea of Azov”.
Tatiana Orlova, chief economist for emerging markets at Oxford Economics, said Russia’s grain exports fell to around ”40pc of normal capacity in August”.
Ukraine, despite producing an early and bumper grain harvest this year, has also struggled to export grain through its Black Sea ports. According to the country’s agriculture minister, Ukraine has exported only about one-third of the grain it could potentially have shipped by sea, rail, river and road.
Wheat prices have already increased in recent weeks, although they remain below the levels seen immediately after Russia invaded Ukraine in 2022.
Analysts warn that continued disruption to grain shipments could push food prices higher worldwide. The situation is being compounded by the Iran conflict, extreme heat in Europe that could reduce crop production, and the effects of El Niño.
Oxford Economics forecasts that global food prices could rise by around ”12pc in 2026”, followed by another ”4.8pc increase in 2027”.
However, Tatiana Orlova believes the situation may not become as severe as it was in 2022. Many major food-importing countries have since increased their grain reserves and are better prepared to withstand supply disruptions.
Still, she said, ”the impact on food prices is likely to be clear.”
