(Dec 22): Grain and oilseed futures edged up in the US, as attacks on both Ukrainian and Russian infrastructure added to fresh worries over crop exports from the key Black Sea region.
Russia stepped up attacks at Ukraine’s Odesa ports in the Black Sea, including Pivdennyi, the country’s largest. A shipping terminal belonging to oilseed firm Allseeds was attacked over the weekend, and the facility was damaged, according to a spokesperson for Vice Prime Minister Oleksiy Kuleba. The company confirmed that its terminal came under bombardment on Dec 20 and at least one person was killed.
“The strike caused extensive damage, including significant fires on site, the destruction of thousands of tons of stored sunflower oil, and damage to critical infrastructure,” Allseeds said on its website.
Russia again delivered a strike at Pivdennyi port overnight, Kuleba said. Thirty containers with flour and vegetable oil caught fire after the attack.
Meanwhile, Russia said a drone attack damaged infrastructure and vessels at the Black Sea port of Taman, which handles products including grains, fertilisers and oil. The assault struck two tankers and two piers at the port’s Volna settlement, local authorities said on Telegram. They added that one connecting pipeline at the terminal and two storage tanks were also damaged.
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Ukraine and Russia are major exporters of grain and sunflower oil, and the recent pickup in attacks on infrastructure risks slowing the pace of shipments. Wheat rose as much as 0.8% in Chicago, rebounding from the worst weekly loss since August that was driven by the outlook for ample supplies. Canola futures in New York, a rival oilseed to sunflowers, gained as much as 2%.
Palm oil futures in Kuala Lumpur also climbed, partly as the attack on the Ukrainian sunflower oil terminals sparked supply concerns, said Anilkumar Bagani, head of research at Mumbai-based Sunvin Group.
“The attacks may affect Ukrainian-origin sunflower oil supplies from Allseeds and other leading exporters, especially to Europe and India,” said Aashish Acharya, vice president at Patanjali Foods Ltd, one of India’s country’s top vegetable-oil buyers. “The recent attack on food supplies is scary, and it would be much more challenging if it flares up further.”
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In a daily address, Ukrainian President Volodymyr Zelenskiy said the nation is focused on the situation in the Odesa region.
“There is a clear understanding of all the challenges — this is Russia’s attempt to block Ukraine’s access to maritime logistics,” Zelenskiy said. “The world must not remain silent about this.”
Ukraine engaged in a new round of talks with the US over a possible peace deal last week. Meanwhile, it has intensified attacks on tankers tied to Russia’s oil trade to deprive Moscow of oil revenues to fund the war.
In other markets, soybean traders continue to track whether China, the world’s top buyer of the oilseed, would continue to fulfill its apparent pledge to buy US soybeans.
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