Wheat price rises by 40%: how will this affect the cost of bread

The global wheat market has faced a new surge in prices after attacks on ships and port infrastructure nearly halted grain exports from the Black Sea region. The reduced supply has forced importers to look elsewhere for grain, driving up its cost.

Reuters reports this.

As of September 23, wheat prices on the Chicago Board of Trade have risen 40% from their June highs, reaching their highest level in 3.5 years.

Grain availability issues are primarily affecting countries in Asia, the Middle East, and Africa. These regions traditionally purchased significant amounts of wheat from Ukraine and Russia, but due to disruptions to Black Sea exports, they are now forced to look for new sources of supply.

Some Asian buyers have already switched to Australian and Argentine grain. However, this switch is more expensive. For example, Indonesian flour producers now buy Australian wheat at a price 20-25% higher than they previously paid for grain from the Black Sea region.

In recent months, importers have been slow to build up new stocks, hoping for a possible resumption of Black Sea supplies. However, expectations have not materialized, and stocks in import-dependent countries have begun to decline.

The market situation is likely to remain tight until the end of the year. Buyers will have to compete for available grain lots until the new crop from the Southern Hemisphere begins to arrive. This could keep prices high or cause them to rise further.

Higher wheat prices also increase risks to food prices, which could be most damaging to countries that rely heavily on imported grain.