World breadbaskets getting pounded by war, weather and trade spats

Global Wheat Supplies Under Pressure as War, Weather, and Trade Policies Converge

Wheat, a staple in diets from instant noodles to chapatis and sliced bread, is under a convergence of pressures this year. The world's breadbaskets are being hit by drone strikes, extreme weather, and trade spats, pushing prices higher amid already elevated food costs, according to reports from ABC Australia and the Hartford Courant.

War Disrupts Black Sea Exports

The Black Sea, a crucial route for global wheat trade, remains an active war zone. Grain terminals in Novorossiysk suspended operations after a drone attack in early August, while Russian bombing campaigns have targeted the Ukrainian port city of Odesa, as reported by the Hartford Courant. These disruptions have halted Black Sea shipments of grain. The Ukrainian Agri Council warned that a blockade could cause a wave of bankruptcies, according to the same report.

Ukraine has used the Danube River as an alternative export route, but drought has plummeted water levels there, hampering that option, the Hartford Courant noted.

Russia and Ukraine together account for nearly a third of the wheat the world buys, making these disruptions particularly significant, according to both outlets.

Extreme Weather and Reduced Harvests

Extreme weather is compounding the conflict-driven shortages. The United States is expected to have its worst wheat harvest since 1970 due to drought in the Great Plains, as reported by the Hartford Courant. US wheat stocks are down, and prices of US soft red wheat jumped nearly 25% in the first seven months of the year, according to Joseph Glauber, a former chief economist at the US Department of Agriculture, quoted by the Hartford Courant.

European producers are also suffering. France expects lower wheat yields due to record heat, according to government projections cited by the Hartford Courant. Germany's main farmers group said yields were down for several crops due to drought and heat. The European grain trade body Coceral estimated wheat yields for Europe and Britain at 286.6 million metric tons, down from 310 million metric tons in 2025, as reported by the Hartford Courant.

Australia, a major wheat exporter, is also facing a grim season. The Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) forecasts the total winter crop, including wheat, barley, and canola, will fall 21% to 54.5 million tonnes in 2026–27, as reported by ABC Australia. The area planted is forecast to fall 12% to 10.9 million hectares, the smallest in six years. Higher input costs, including fertilizer, are a key factor, with the closure of the Strait of Hormuz affecting fertilizer imports, as noted by ABC Australia. El Niño is likely to further hit summer crops such as sorghum and rice in Australia, according to the same report.

Trade Policies and Rising Costs

Trade disputes are adding to the pressures. According to the Hartford Courant, poor countries that agreed to buy American wheat under the threat of Trump tariffs could be stuck paying abnormally high prices. Bangladesh, for example, agreed to buy US wheat under such pressure but has denounced the deal and is attempting to renegotiate it. Indonesia agreed to purchase up to 2 million tonnes of US wheat per year to lower tariffs to 19%, as reported by the Hartford Courant.

Input costs are soaring. Diesel prices have surged more than 45% in the past year, partly due to Ukraine's bombardment of Russian oil refineries, according to ABC Australia. Oil prices have surged back above $US90 a barrel after the breakdown in US-Iran negotiations, though well below the $US126 peak earlier this year, the same report noted. Russia has been forced to import diesel as citizens queue for fuel, according to ABC Australia.

A Global System Under Strain

The simultaneous troubles reveal the risks inherent in the global food system, as the Hartford Courant noted. Only a few crops, like wheat, provide most of the world's calories. Relatively few governments dominate wheat exports, including Russia, Canada, the United States, Ukraine, and the European Union. Together, the US and Canada account for 25-30% of global wheat exports, as reported by ABC Australia.

Their customers are mainly low-income countries that no longer grow much of the food their people eat. Egypt, for instance, is trying to bolster domestic wheat production but remains far from self-sufficiency due to water constraints, according to the Hartford Courant.

The global atmosphere is hotter than normal due to a century of fossil fuel burning, threatening the livelihoods of small farmers in poor countries, the Hartford Courant reported. A supercharged El Niño threatens further water levels in the Panama Canal and has already reduced water levels to perilously low levels in the Rhine and Danube rivers in Europe, raising transportation costs, according to the same report.

The last El Niño in 2015-2016 worsened food insecurity for an estimated 60-100 million people, per the World Food Program, which now warns that El Niño could expand the ranks of the food-insecure to 274 million, up from 225 million today, as reported by the Hartford Courant.

Despite these warning signs, global wheat prices have yet to respond to impending supply shortfalls due to bumper crops in recent years, according to ABC Australia. But with war, weather, and trade spats converging, the pressure on the world's wheat supply is mounting, and the poorest nations are likely to feel the impact first.