6:31 p.m. ET, July 19, 2023
Analysis: Putin just spiked worldwide wheat prices. Here's how
From CNN's Zachary B. Wolf
Russian President Vladimir Putin appears to have declared open season on Ukraine’s consequential grain exports, targeting the port city of Odesa with a new ferocity and jeopardizing worldwide food prices.
With the strikes on Odesa, Putin says he wants payback for damage to a nearly 12-mile bridge that connects annexed Crimea to the Russian mainland.
But they also coincide with Russia’s retreat from a yearlong deal known as the Black Sea Grain Initiative to keep Ukrainian grain flowing to the world.
Wheat and corn prices on global commodities markets jumped Monday after Russia pulled out of the deal, and they spiked again Wednesday after attacks on the ports in Odesa and as hope faded for Russia to rejoin the grain deal.
Turkey brokered previous versions of the grain deal and it
plans to host Putin for talks in August.
Without a new grain deal, the options are to use railroads to ship Ukrainian grain to ports in Romania or in southeastern Europe. The problems in both of those scenarios are time and money, according to Simon Evenett, a professor of international trade and economic development at the University of St. Gallen in Switzerland. He
told CNN’s Rosemary Church that ports in Romania are currently being expanded.
Church noted that China has come to rely on grain from Ukraine and wondered if Beijing could lean on Russia to reenter the deal.
Evenett said it’s true that China has also suffered from droughts that have affected its domestic production.
“If those droughts turn out to be as significant as people highlight, then maybe Beijing will be moved to put leverage onto Russia to relent on this,” Evenett said. “But I think there’s a series of ifs there. It’s not clear yet if Beijing is particularly worried about its own food security needs.”