Russia's decision to terminate its participation in the Black Sea Grain Initiative is already taking a toll on wheat, soybean, and corn.
After the Russian government pulled out of the Ukraine grain deal, prices of the mentioned grains above are rising.
Russia's Grain Deal Termination Leads to Wheat Price Hikes
According to CNBC's latest report, Russia announced its withdrawal from the grain deal on Monday, July 17.
"Today is the last day of the Grain deal. When the respective parts for Russia's benefit are fulfilled, Russia will return to the deal," said Russian Diplomat Dmitry Peskov.
Because of Russia's decision, soybean, corn, and wheat price hikes are now on the news.
After the deal's termination, the Wheat prices increased by 3%, reaching 689.25 cents per bushel.
Corn futures also rose, reaching more than 526 cents per bushel. Meanwhile, prices of soybean soared by up to 1,388.75 cents per bushel.
Before the deal's termination, Russian President Vladimir Putin already complained that the export of Russian fertilizers and food was not honored even though they are under the Black Sea Grain Initiative.
BBC News reported that Putin also complained that the Western sanctions were preventing the country's agricultural export.
Because of this, Putin warned that they will terminate the Ukraine grain deal-and this is what the Russian government did.
Why Other Nations Should Be Worried
The decision of Russia to terminate the Black Sea Grain Initiative should worry other nations as well.
The University of St. Gallen Prof. Simon J. Evenett explained that the Russian government's withdrawal from the grain deal reflects the "coup de grace" of the Black Sea Grain Initiative.
"The demise of the Black Sea Deal is a blow for the nations sourcing cheaper Ukrainian wheat.," said the global trade and economic specialist.
He added that the deal's demise could cause a minor disturbance. But, if the deal's termination will not trigger lots of export bans.
"Going forward what matters is whether Russia weaponizes its wheat exports," he added.
