Gavin Maguire and Naveen Thukral

SINGAPORE (Reuters). -Stoking tensions between Russia and Ukraine, two of the world’s largest crop producers, will force many buyers of sunflower oil, wheat and corn to find alternative shipments. The result could be a sharp rise in global food prices that has been at or near multiyear highs since 2011, traders and analysts said.

The global stock market fell on Tuesday, while the surge was seen on Tuesday. Europe’s eastern flank looked at perilous after Russian President Vladimir Putin sent troops to eastern Ukraine. [MKTS/GLOB][O/R]

The two countries account for 29% of the world’s wheat exports and 19% of the world’s sunflower oil supplies. Traders were concerned that military intervention could have an impact on crop movement, and cause a scramble among importers to replenish supplies from the Black Sea.

Chicago wheat futures surged more than 2% Tuesday. Corn hit a seven month high on Tuesday and soybeans also gained ground. The decline in global production has helped all three major food and feed ingredients rise around 40% since their 2021 lows. [GRA/]

Phin Ziebell (OTC: agribusiness economist, National Australia Bank) stated that disruptions in supply from the Black Sea will affect overall global availability. “Buyers from the Middle East, Africa and elsewhere will seek alternative sources,” Phin Ziebell told Reuters.

According to data from Refinitiv shipping, around 70% of Russia’s wheat exports ended up in Africa and the Middle East in 2021.

Tradesmen claim that the increased tensions are causing some customers to switch vessels to suppliers due to concerns about a possible outbreak of war, which could lead to long loading times.

One trader based in Singapore said that ships are not entering the Black Sea due to the risk of war. Already, supply disruptions have occurred.

The lack of supply from the Black Sea could increase demand from Canada and the United States for this bread-making ingredient.

According to the U.N. agency for food, world food prices have already reached 10-year highs due to strong demand of wheat and dairy products.

Additional support is being provided by a rise in crude oil prices and an increase in the use of agricultural goods to make alternative fuels.