Global prices for wheat and corn soared Tuesday after a major dam in Ukraine collapsed, renewing market fears about the fragility of the country’s ability to ship food to Africa, the Middle East and parts of Asia as it fights a war with Russia.
Wheat prices gained 2.4% in early trading Tuesday on the Chicago Mercantile Exchange, to $6.39 a bushel. The cost of corn rose more than 1%, to $6.04 a bushel, and oats gained 0.73%, to $3.46 per unit. Prices were higher earlier in the day but faded.
The destruction of the Kakhovka dam and hydroelectric power station, which sits in a Russian-controlled area on the Dnieper River, raised concerns about disruption to Ukraine’s affordable supplies of wheat, barley, corn and sunflower oil getting to developing nations where people are struggling with hunger and high food prices.
“Anytime this war shows signs of getting further escalated, there’s a lot of concern,” said Joseph Glauber, senior research fellow at the International Food Policy Research Institute. “Markets react to that.”
Ukraine and Russia are both major agricultural suppliers and the war’s disruption to their exports worsened a global food crisis tied to droughts and other factors. Breakthrough agreements brokered by the U.N. and Turkey last year got food moving again through the Black Sea, but it’s faced setbacks.