2023-06-07 18:56:15
The intensification of the fighting pushes up the price of cereals
Cereal prices have risen over the past few days due to intensified fighting in Ukraine, but also dry weather in northern Europe and the United States.
Two major events are capturing the markets’ attention: Tuesday’s destruction of the Kakhovka dam in southern Ukraine, whose waters submerged tens of thousands of hectares of arable land, according to the Ukrainian Ministry of Agriculture , and statements by the Russian Defense Ministry, which on Wednesday accused Ukrainian forces of having sabotaged on Monday, in the Kharkiv region (north-east), an ammonia pipeline linking the Russian city of Togliatti to the Ukrainian port of ‘Odessa. It has not been powered since February 2022, but Moscow hoped to bring it back into service.
Before the war, it allowed Russia to export annually more than 2.5 million tons of ammonia, the main ingredient of nitrogen fertilizers, mainly to the European Union. Moscow has repeatedly asserted that the Black Sea grain agreement, signed in July 2022 and which allowed the export of more than 31 million tons of grain from Ukraine, would only be renewed if progress was made for its own grain and fertilizer exports.
“The reactivation of the ammonia pipeline was part of the Russian conditions for an extension of the Black Sea agreement. Its destruction might bury the UN project, which was trying to obtain its reopening” at the request of Russia and pleaded for a « extension » of the agreement to other Ukrainian ports, at the request of kyiv, explained Damien Vercambre, of the firm Inter Courtage, interviewed by Agence France-Presse.
US winter wheat has rallied almost 10% since last Wednesday, and its price has risen 4.3% in five days on the Euronext platform.
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