Wheat futures traded in South Africa reached the highest price since 2008 amid the continued standoff between Russia and Ukraine, threatening export supplies of the grain.
Ukraine will be this year's sixth-biggest shipper of wheat, according to International Grains Council (ICG) estimates. The nation is South Africa's second-largest supplier of the cereal after Russia, accounting for 36% of imports since the current season started at the end of September, according to data on the South African Grain Information Service's website.
"Escalating tensions in Ukraine are causing supply disruptions," Benjamin Swanepoel, an independent trader, said by telephone from Johannesburg. "Ukraine is a very big exporter of wheat, and any disruptions there will be the cause of rising prices."
Wheat for delivery in May rose 2.3% to R4 005 a metric tonne by the noon close on the South African Futures Exchange. That was the highest level for a most-active contract since June 17 2008, data compiled by Bloomberg showed.
Russia is wresting control of Ukraine's southern Crimea region, sparking the worst crisis between Russia and the West since the Cold War. Ukraine says its neighbour has as many as 19 000 troops in the area. South Africa is a net wheat importer and sub-Saharan Africa's largest grower of the grain after Ethiopia, according to the US department of agriculture.
White corn for delivery in May dropped 1.9% to R2 502 a tonne, while the yellow variety for delivery in July gained 0.9% to R2 235 a tonne. Ukraine will rank third globally this year among exporters of the grain, according to the IGC.
South Africa is the continent's largest producer of corn. White corn is the source for a meal that's a staple food in the country, while the yellow variety is mainly fed to animals. – Bloomberg