Wheat prices on the global market have begun to rise again due to the ongoing Russia-Ukraine war. Ukraine has been granted the right to carry out strikes within Russian territory, which has disrupted shipping in the Black Sea. As a result of these logistical issues, the cost of wheat has increased by $3 to $4 per ton.

Levan Silagava, Executive Director of the Georgian Wheat and Flour Producers Association, stated that this price increase is not significant at this point.

"The rise in prices is due to Ukraine being allowed to target Russian territory, which has disrupted the movement of ships across the Black Sea. This, in turn, has raised logistical costs, leading to shipping delays and price hikes," Silagava explained.

Given that Russia and Ukraine are among the largest wheat suppliers globally, such price increases are expected. However, Silagava emphasized that the increase is not yet dramatic.

He also noted that wheat price hikes are not anticipated in Georgia in the short term for several reasons. First, grain is delivered to Georgia by road, so the Black Sea shipping delays do not pose a major issue at the moment. Additionally, the country has already secured its grain stock. Another factor is the approaching New Year holiday period, during which economic activity typically slows down for about a month.

"The New Year's break lasts from December 20 to January 20. We’ve already stocked up on grain, so we’re not facing any immediate challenges," Silagava said.

While he believes the current price increase is not significant, Silagava warned that if this trend persists, wheat prices could rise substantially after the New Year.

"The current $3-4 per ton increase is not dramatic. The price is still adjusting to find its equilibrium. This has not yet become a trend, but if the rise continues, it could develop into one. We expect this pricing adjustment to take about two weeks, but with the holiday season approaching, we don’t foresee major changes during that time. Any significant shifts are likely to occur after the New Year," he added.

Before shipping disruptions in the Black Sea, global wheat prices had been falling due to a strong harvest.