Global grain and oilseeds prices soared, reports CRM Agri, in reaction to the news as Russia, the world's second largest exporter of wheat embarked on an unprecedented assault on Ukraine, the fourth largest wheat exporter, globally.
“Global grain market volatility has increased sharply and will remain highly volatile whilst there is so much geopolitical uncertainty in play.”
Those UK analysts also noted that current season imports of OSR from Ukraine are all but complete, but “with an uncertain political outlook, availability for next season continues to push new crop markets higher, and, in turn, old crop markets are also once again finding support.”
Crude oil has also once again found support as buyers move to quickly take cover, said the CRM Agri team. “The EU is heavily reliant upon energy from Russia, leaving markets fragile and sensitive to the evolving situation.”
Bunge, Cargill operations in Ukraine
Meanwhile, there is increasing evidence of an impact on physical flows of grain from the region.
Bunge told us it had temporarily suspended its operations at the processing facilities in Nikolaev and Dnipro in Ukraine and the company offices are closed, due to the recent developments and military action in the country.
The news was first reported by Reuters.
"Bunge’s highest priority and primary concern is for the safety of our employees. We remain in constant contact with our teams and we will continue to follow developments and take all appropriate actions to protect our employees and our business in the country.
"Taking advantage of Bunge’s global network and footprint, the company will work to minimize any impact on our supply chain," read a statement.
Bunge has over 1,000 employees in Ukraine; they are responsible for the operation of two processing facilities as well as multiple grain elevators in different parts of the country, along with a grain export terminal in the Nikolaev commercial port.
Bunge also operates a dry corn milling facility in the Vinnytsya region through a joint venture with the Dacsa group.
Other agribusiness groups' operations in the region has been affected by the escalating conflict as well. According to media reports, a vessel that Cargill chartered was “hit by a projectile” on the Black Sea on Thursday. The ship remained seaworthy and all crew were safe and accounted for.
Cargill owns a majority stake in a deep-sea port on the outskirts of Odessa, from where its ships grains and oils around the world. That port, along with several other Ukrainian commercial ports, closed yesterday.
Shipping group, Maersk, announced on Thursday that it had halted all port calls in Ukraine, for the moment, and it also said it had shut its main office in Odessa on the Black Sea coast because of the conflict.