LondonCNN Business —
Prices of wheat and corn on global commodities markets rose on Monday after Russia pulled out of a deal that had allowed some vital grain exports from Ukraine to pass through the Black Sea despite the war.
Wheat futures on the Chicago Board of Trade jumped 6% on Monday to $8.79 a bushel. Corn futures were up 2.64% to $6.98 a bushel. Palm oil futures trading in Malaysia also rose, Reuters reported, on fears over the potential impact on exports of Ukrainian sunflower oil.
Russia suspended its participation in the grain deal on Saturday, after what it claimed was a drone attack by Ukrainian armed forces on its Black Sea fleet in the Crimean city of Sevastopol. But Ukraine has accused Russia of blackmail and of inventing “fictitious terrorist attacks” on its own facilities in Crimea.
The United Nations-brokered deal, which was agreed in July, played a crucial role in lowering the prices of wheat and other commodities globally. Although it was due to expire on November 19, efforts were already underway to extend the agreement.
On Friday, UN Secretary General António Guterres said the renewal of the Black Sea Grain Initiative was crucial to avert a global food crisis.
“We underline the urgency of doing so to contribute to food security across the world, and to cushion the suffering that this global cost-of-living crisis is inflicting on billions of people,” he said in a statement.
The UN estimates that the reduction of prices for staple foods as result of the deal has indirectly prevented some 100 million people from falling into extreme poverty. Exports of grains and other food products under the initiative have surpassed 9 million tons, according to the intergovernmental organization.
After reaching record highs in the spring, the UN Food and Agriculture Organization’s global food price index has declined for seven months in a row.
Twelve vessels left Ukraine’s Black Sea ports on Monday despite Russia’s withdrawal from the deal, Ukraine’s Minister of Infrastructure Oleksandr Kubrakov said on Twitter. The ships were carrying 354,500 tons of grain and other agricultural products destined for Africa, Asia and Europe, the Ministry of Infrastructure said on its Facebook page.
One of them, loaded with 40,000 tons of grain, is destined for Ethiopia, Kubrakov added.
The UN announced earlier on Monday that it had agreed with Ukraine and Turkey to move 16 vessels through the Black Sea. Russia had been informed of the plan, it said.