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· Posted on
February 21, 2024

No grain = more price pain as Russia pulls out of the Black Sea Deal

Russia has formally ended the grain export deal for Ukraine last week.

What's the key learning?

  • Russia's move is causing experts to worry about a potential global food shortage if food supply needs to take a longer (and pricier) detour.
  • Without the Black Sea route, grain has to take a pricier detour to get where it needs to go.
  • Global politics impacts the price you pay at the supermarket.

👉 Background: Ukraine accounts for 10% of the world wheat market, and 15% of the corn market. These food supplies are transported via the Black Sea.. which happens to border many countries - Ukraine, Russia, Georgia, Turkey, Bulgaria and Romania.

👉 What happened: Last July, the UN and Turkey locked in a grain export deal for Ukraine. But now, Russia has formally ended this grain deal last week.

👉 What else: This move is causing experts to worry about a potential global food shortage if food supply needs to take a longer (and pricier) detour.

What's the key learning?

💡Global politics impacts the price you pay at the supermarket. Case in point: When this news broke last week, the price of wheat jumped.

💡Without the Black Sea route, grain has to take a pricier detour to get where it needs to go.

💡And it's not the first time that politics has had a direct impact on the cost of goods:

  • China placed enormous tariffs on Australian wine producers, which severely impacted sales of Australian wine into China.

‍

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