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Russia’s drone attack on Ukraine’s Danube Port triggers global grain price surge

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Global food prices surged today following a brazen attack by Russia on Ukraine’s main inland port across the Danube River from Romania. The attack on the port of Izmail came as Russia escalated its use of force to prevent Ukraine from exporting grain, amid rising tensions in the region.

The drone strikes on the port of Izmail resulted in the destruction of buildings and halted ships that were preparing to load up with Ukrainian grain. The Russian drone attacks reportedly damaged almost 40,000 tons of grain destined for countries in Africa, China, and Israel, according to Ukrainian deputy prime minister Oleksandr Kubrakov.

President Volodymyr Zelenskiy reacted strongly to the attack, accusing Russia of targeting ports and posing a threat to global food security. Meanwhile, Russian state news agency RIA claimed that the port and grain infrastructure were housing foreign mercenaries and military hardware, though this information remains unverified.

The port of Izmail, situated across the river from NATO-member Romania, serves as the main alternative route for Ukrainian grain exports after Russia imposed a de-facto blockade on Ukraine’s Black Sea ports in mid-July. Commercial ship-tracking data showed dozens of international ships halting and anchoring at the mouth of the Danube, as they tried to breach Russia’s blockade.

As a major grain exporter, Ukraine’s agricultural and port infrastructure has been under attack by Russia for over two weeks, following Russia’s refusal to extend an agreement that had lifted the war-time blockade of Ukrainian ports last year.

The recent attack on the port of Izmail led to a nearly 5% increase in Chicago wheat prices due to concerns over supply disruptions. However, prices later fell on reports of strong Russian exports and signs that Moscow might consider reviving the Black Sea corridor deal.

The Kremlin stated that President Vladimir Putin reiterated Russia’s condition for rejoining the grain deal during a telephone conversation with Turkish President Tayyip Erdogan. The condition calls for the implementation of a parallel deal to improve Russia’s terms for its own food and fertilizer exports.

In response to the attacks, U.S. ambassador Bridget Brink condemned the relentless strikes on various Ukrainian cities and facilities, stating that Russia has shown no desire for peace and has disregarded civilian safety. The United Nations has also warned of a potential food crisis in the world’s poorest countries due to Russia’s decision to abandon the grain deal, which was brokered by the U.N. and Turkey.

Kyiv claims that Russia’s goal with the strikes is to reimpose a blockade by discouraging shippers and their insurers from using Ukrainian ports. Ukraine’s Danube river ports accounted for a quarter of grain exports before Russia’s withdrawal from the Black Sea deal, making them crucial for the nation’s grain trade.

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