Wheat prices dropped almost 3% on Friday following media reports that Ukraine and Russia struck a deal on grain shipments. The price, which hit record highs after Russia’s invasion in February, is now back to pre-war levels.
Ukraine and Russia reached a deal to allow crucial grain shipments to safely leave Black Sea ports, according to media reports, potentially alleviating a brewing global food crisis.
US wheat futures dropped almost 3% to a five-month low of $786 per bushel, meaning the price has unwound almost all of its “war gains.” Russia invaded Ukraine in late February, triggering a 70% surge in the price of wheat to a record high of over $1,300 in the two weeks that followed. The two countries together account for a quarter of the world’s wheat exports.
The BBC said Turkey successfully brokered a deal between the two sides.
Drought across key growing regions like the United States, India, and Canada earlier in the year threatened to further squeeze availability of wheat and other grains, putting millions around the world at grave risk of hunger. Some countries, such as India, instituted export bans to stave off unrest at home.
Food price inflation is hurting the pockets of consumers everywhere, but it is felt most acutely across the developing world, where the combination of soaring inflation and a stronger US dollar is pushing a number of countries, such as Sri Lanka, to the brink of bankruptcy.
