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It's been six months since Russia's unprovoked attack on Ukraine, which upended decades of peace in Europe and set off a series of wide-ranging consequences, including a spike in wheat prices and a worsening of the ongoing global food crisis.
The area around the Black Sea, which includes Ukraine and Russia, has been called the "world's bread basket," thanks to its fertile soil and high rates of grain production.
Together they account for nearly 30% of global wheat exports, with some countries, especially in the Middle East and northern Africa, relying heavily on wheat from the region.
But when Russia invaded Ukraine on February 24, grain exports were essentially cut off overnight from a key port in Odesa in southern Ukraine. The price of wheat, already high, skyrocketed, exacerbating high food prices due to supply chain issues and the pandemic.
It would take more than five months before Ukraine grain shipments resumed across the Black Sea, which, paired with other global wheat supply factors, has improved the forecast significantly since the spring. But the threats to the wheat supply, and global food security, remain.
"It's a situation where some things have changed considerably, and other things, really not at all," J. Mark Welch, a grain markets economist at Texas A&M University, told Insider.
When Russia first invaded, there were many unknowns: How or when will Ukraine be able to move grain that was ready for shipment? What will happen to this year's crop if farmers can't tend to their fields? Will Russia be able to keep up its own grain exports?
As a result, the price of wheat skyrocketed in March and peaked in mid-May, after which it began to fall, despite the ongoing war and the fact that Ukraine had not yet been able to ship from its ports.
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Welch said by then the global picture had become clearer as countries in the Northern hemisphere began harvesting winter wheat crop in June and July, alleviating some of the shortage concerns, among other factors. Ukraine had also been able to move some grain by land.
By July 22, the United Nations had brokered a deal with Turkey, Ukraine, and Russia to resume Ukrainian exports through the Black Sea, prompting the price of wheat to fall to pre-war levels. On August 1, the first ship transporting Ukrainian grain through the Black Sea set off from the port of Odesa, "Ukraine's primary outlet to the world."
"At that point, there had been nothing. That port had been shut down since the invasion. Nothing had moved at all," Welch said, adding that the first ships to leave port on August 1 were carrying grain that had been loaded on them on February 24, the day of the invasion.
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"We're seeing some grain move out of Ukraine, and Russia is also indicating that they're increasing their grain exports," Welch said, adding the opening of the port was very positive. "That kind of alleviates some of the most dire prospects that we were looking at a month or two ago." Source: Businessinsider
