UN calls halt to Ukraine grain-export ships after Russia warning

The United Nations has called a halt to grain ships moving through Ukraine’s crop-export corridor on Wednesday, after Russia warned that ships weren’t safe using the route.

Wheat prices rose after the UN announced the decision, taken jointly with Turkey and Ukraine. It didn’t explain the reasoning but the move comes after a deal aimed at allowing for crucial Black Sea grain shipments unravelled and Moscow said ships’ safety couldn’t be guaranteed. 

Russia suspended its role in the pact over the weekend, citing drone strikes against its naval vessels. The agreement -- signed in July -- guaranteed the safe passage of Ukraine crop exports, which are badly needed by food importers amid surging prices and a global cost-of-living crisis.

Grain vessels continued to leave Ukraine on Monday and Tuesday, even after Moscow withdrew its support for the deal. But the UN said Tuesday those movements were “temporary and extraordinary”.

Ukraine is one of the world’s top grain and vegetable-oil suppliers, and US President Joe Biden slammed Russia’s pullback from the deal as a risk to heightening global hunger. Its farmers are in the midst of autumn harvests and may be forced to resort to costlier and lengthier export routes by rail, road and river if the halt to vessel traffic lasts.

Wheat futures in Chicago rose 0.7%, reversing earlier losses. Prices surged more than 6% the prior session. Corn and soybean oil also traded slightly higher.