Russia's invasion of Ukraine has disrupted regional export shipments, sent grain futures and crude-oil prices soaring, and may trigger higher fertilizer prices.
Russia and Ukraine together account for a third of global wheat exports, a fifth of corn exports and more than three-quarters of sunflower oil, Keith Good reports for the University of Illinois' Farm Policy News. Russia is also a major exporter of fertilizer components nitrogen, phosphorus and potash.
Though sanctions against Russia haven't banned food or agricultural exports, "that hasn’t stopped global grain prices from soaring," Politico reports. "Wheat futures prices at the Chicago Board of Trade, the global benchmark, surged 6 percent earlier this week, to about $9.34 a bushel, the highest in nine years. Wheat futures are up 10 percent since the start of the year."Even without trade sanctions, farm exports from those countries have slowed to a trickle, since Russia and Ukraine have suspended most commercial railways and ports near the conflict, Good reports. And many ships will be reluctant to trade there for fear of getting caught in the conflict.
"It is not clear if the West would hit Russia's fertilizer industry with sanctions, but it is possible. Ukraine's neighbor Belarus is the world's second-largest exporter of potash fertilizer and was hit with sanctions from Europe and the U.S. in 2021," Chris Clayton reports for Progressive Farmer/DTN. "Because of ethanol and biodiesel, crop prices are also influenced by swings in energy prices. Crude oil prices have surged to their highest levels in seven years as Russian troops threaten Ukraine. The main concern is Russia may hold back oil production as a lever against any punitive response from the West."
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