Russia-Ukraine Tension Drives Up Wheat Prices

Tensions between Russia and Ukraine have driven up the price of wheat and created uncertainty in markets as the situation plays out.

Wheat prices on the Chicago Mercantile Exchange went up 7% over the last two weeks, according to the Wall Street Journal. The price reached nearly $8 a bushel, close to a decade’s high set last year. In Europe, wheat futures rose almost 6%.

Between the two of them, Russia and Ukraine produce 29% of the world’s wheat. The price rises are a response to growing militarization by Russian forces on the Ukrainian border.

“That is a huge quantity and it means prices could easily double,” a Rabobank researcher told the Journal.

However, prices could easily reverse if tensions deescalate, or even if a conflict turned out to be not as bad as feared. When Russia annexed the Crimea from Ukraine in 2014, wheat prices jumped 25% but quickly came back down.