Wheat prices continued to skyrocket this week—hitting their highest level in 14 years on Thursday—as experts warn that the escalating conflict between major exporters Russia and Ukraine could lead to a rise in food prices, which have already been hard-hit by surging inflation .
Chicago futures for wheat prices continued to surge higher on Thursday, jumping another 7% to $11.34 per bushel—trading at their highest level since 2008, as the fighting between Russia and Ukraine could potentially disrupt global food supplies.
Russia and Ukraine account for nearly 30% of global wheat exports combined—and the two countries are particularly important suppliers to the Middle East, North Africa and Asia—but the ongoing conflict has raised fears of global shortages and rising food prices.
Ukraine’s ports have been closed due to the heavy fighting—with many farmers recruited to help defend their homeland, while Russian exports are likely to take a major hit from trade restrictions and heavy sanctions from the West.
While higher wheat prices might be good news for US farmers (as it could bring back more domestic demand), that’s not necessarily true for consumers, as experts warn that pricing pressures could be felt across the world.
The ongoing conflict could drive up US food prices, which were high to begin with thanks to surging inflation: The recent spike in wheat prices is likely to make the commodity more expensive for food producers, who in turn could pass some of those costs on to consumers.
That could raise the prices of US consumer items like cereal and bread, for instance, though the impact may not be felt right away since consumer prices usually lag commodity prices, which are contracted in advance.