The global wheat and corn prices have surged after a significant dam collapse in southern Ukraine, resulting in a potential ecological disaster. According to news reports, wheat prices jumped 3% after the collapse, on fears that floodwaters would ruin crops, as Ukraine and Russia are major breadbasket supplying countries. The cost of corn also rose more than 1% (to $6.04 a bushel) and oats gained 0.73% ($3.46 per unit) on the Chicago Mercantile Exchange. Joe Janzen, an assistant professor at University of Illinois Urbana-Champaign’s College of Agricultural, Consumer and Environmental Sciences, says “Ukraine has historically been one of the major exporters in the world wheat market.” However, the market fluctuated during the day, going higher and lower.
When the dam burst, it endangered crops in the southern Ukraine breadbasket and threatened drinking water supplies. Furthermore, officials have warned of a looming environmental disaster due to oil escaping from the dam machine and significant flooding. Andrey Sizov, the managing director of Black Sea agricultural markets research firm SovEcon, stated that the dam’s collapse looked “like a big escalation with significant consequences and huge headline risk.” Sizov asserts that this “could be just the start of the bull run” on prices as the dam burst raised concerns about the ecological impact. However, Ukraine has blamed Russia for destroying the dam, while Moscow denies it, pointing to Ukraine’s own bombs in the region.
