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The attack on a Ukrainian grain hangar on the Danube River, an alternative shipping route that has become an economic lifeline, is making Ukrainian grain exports very difficult.
For ocean carriers looking for a way to bring Ukrainian grain to global markets, the options keep dwindling, escalating a trade crisis that is expected to add pressure on global food prices, says The New York Times.
The Russian government announced July 17 it was backing out of a wartime trade deal that allowed Ukraine to send grain exports to other countries in the Middle East, Africa and Asia via the Black Sea.
Read more: Russia Backs Out of Wartime Grain Deal with Ukraine
On July 24, it threatened an alternative route for grain, attacking a grain hangar at a Ukrainian port on the Danube River that has served as a key artery for transporting goods while the Black Sea remains blockaded. A grain depot was also destroyed in the Black Sea port city of Odesa, which has come under almost nightly attack, according to BBC News.
Hours after the predawn attack on the hangar at the port of Reni, dozens of vessels that had been bound to collect grain from Ukraine were clustered at the mouth of the Danube.
Global markets have adequate supplies of grain because of robust harvests in Brazil and Australia, but a prolonged shortage of exports from Ukraine is likely to make prices more volatile in the event of droughts, floods or other extreme weather events. Russia stepped up the attacks on Ukraine after India, a top producer of rice, halted exports of non-basmati white rice July 21, because extreme weather had hit production and caused domestic prices to jump.
Read more: India Bans Some Non-Basmati Rice Exports to Control Prices
Even before Russia terminated the Black Sea agreement last week, Ukraine, which produces about 10 percent of the world’s wheat and 15 percent of its corn, had increasingly relied on alternative routes for its exports: by land and through the Danube River, Europe’s second-longest river. Shippers turned to these options in anticipation that Russia would eventually pull out of the Black Sea agreement.
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