War drives wheat prices up again

22-04-2022 | |
Photo: Canva
Photo: Canva

The war in Ukraine is again driving up the price of wheat around the world.

After it emerged that talks between Russia and Ukraine hit a dead end, fears of food shortages have been fuelled.

Speculators have returned en masse after a short period of profit taking.

On Easter Monday, prices in Chicago went up. The futures market in Paris had a day of rest due to Easter, but also picked up its upward trend on Tuesday 19 April.

At the start of trade, €10 per tonne was immediately added to the prices at the end of the previous week. After that, it fell back slightly, but prices remained clearly above those of the end of last week.

New high for May contract

The May contract rose to a new high of €411 per tonne at the start of the new trading day on the Paris stock exchange. On Thursday 14 April, the May contract on the futures market, for the first time, closed just above €400 per tonne. At the beginning of March, this also happened twice with the March contract. At that time, however, little was done about it. Which is also the case now with the May contract. That is currently the delivery period in which most trades are made.

Drought hampers US wheat growth

Reports about US winter wheat status are also pushing up prices. Dry conditions are hampering crop growth in key wheat areas.

Russian wheat exports gain momentum

The fact that the Russians have started exporting more wheat than in previous weeks has had little or no influence on the direction of prices in that respect. Increasingly higher prices have to be paid for this wheat as well. It is striking that Russian wheat exports are gaining momentum, now that the exporters are paying export duties that have already exceeded €100 per tonne.