Geopolitical and Military Instability

Russia’s full-scale invasion of Ukraine in February 2022 became a turning point for the global grain market. For the first time in decades, an armed conflict affected two key players at once: Ukraine, one of the largest exporters of corn and wheat, and Russia, which is expanding its own agricultural export potential under conditions of isolation and sanctions.

It is important to understand that the market no longer perceives this war as a temporary shock. The conflict has already become a structural factor in price formation. The Black Sea Grain Initiative, which operated from August 2022 to July 2023, allowed Ukraine to restore part of its maritime exports. After its termination, export volumes declined: according to USDA data, the forecast for Ukrainian grain exports in the 2023/24 MY fell by 27% compared with the previous season and by 28% compared with the pre-war five-year average. In the 2024/25 MY, Ukraine’s harvest declined due to drought; in addition, EU quotas restricted part of export flows. In the 2025/26 MY, the decline is significant.

By contrast, Russia used the situation to its advantage: in the 2023/24 MY, its wheat exports, according to USDA estimates, reached a record 51 million tonnes. In the 2024/25 MY, Russia faced the consequences of its own record — domestic stocks were depleted, and by the end of the season wheat exports fell to 41.5–42.2 million tonnes, 25% below the record level, according to estimates by Rusagrotrans and Agroinvestor.

Until 2030, the duration and intensity of the conflict will remain the main unpredictable parameter in many market models.

However, the Black Sea region is not the only geography of risk. At least two other areas of tension could also potentially destabilize global food supply chains:

China — Taiwan. The Taiwan Strait is a strategic corridor for 40–50% of global container traffic. An escalation around Taiwan, even without a direct armed conflict, would lead to a sharp increase in freight rates, insurance premiums and long delays in grain supplies to Asia and Oceania — regions where Ukraine, Australia and the United States compete for market niches.
The United States — Venezuela / Colombia / Cuba. Increased U.S. sanctions pressure in the Caribbean, although not a direct factor for the grain market, affects regional logistics corridors and Latin American attitudes toward expanding trade relations with the United States. This may accelerate the reorientation of a number of countries in the region toward non-Western grain suppliers.

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