PARIS/HAMBURG: European wheat prices jumped to 3-1/2 month highs on Monday after Russia attacked Ukrainian grain warehouses on the Danube River, a vital inland export route and a major escalation of attacks on Ukraine’s grain export infrastructure.
Front-month September milling wheat on the Paris-based Euronext exchange was up 6.9% at 264.50 euros ($292.85) a metric ton at 1548 GMT, after earlier hitting 265.25 euros, its highest since April 3.
Russia destroyed Ukrainian grain warehouses on the Danube River in a drone attack on Monday, expanding air campaign including attacks on Ukrainian grain infrastructure that Moscow began last week after pulling out of the Black Sea shipping deal.
Russia has been carrying extensive attacks on Ukrainian grain infrastructure, mostly the port of Odesa, since it left the Black Sea grain export deal.
“It’s quite a big development,” Carlos Mera, head of agri commodities markets research at Rabobank, said. “The importance of these ports had increased after the end of the Black Sea Initiative last week. There was hope that these ports would work at full capacity in the near future.” He estimated Danube ports’ export capacity at 2.5 million metric tons of grain and oilseeds per month before the Russian strikes.
“The big question mark is whether Russia will continue to attack these ports in the near future,” Mera said, adding that there remained uncertainty about the extent of the damage.
Traders were concerned that Russian attacks could cut Ukraine’s land exports rapidly.
“Russia has in the past months not attacked Ukraine’s overland and inland waterways grain infrastructure,” one European trader said. “Any interruption of this traffic could quickly hit international grain supplies,” he added.
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