Global grain markets had little reaction to the announcement by Russia that it was pulling out of the Black Sea grain deal, with wheat futures actually closing lower on the day on Monday.

There may have been some hope that Putin’s withdrawal from the deal was merely a negotiating tactic and that transports would quickly resume – as happened in October of last year.

However, since Monday, the situation has deteriorated considerably.

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Russia has launched nightly attacks on the three Black Sea ports that were subject to the deal, destroying considerable amounts of critical grain-exporting infrastructure.

An intense bombardment of Odessa destroyed at least 60,000 tonnes of grain, according to AP reports.

Incoming ships 'targets for attack'

Further adding to tension, Russia said that it would view any incoming ship to the area to be laden with weapons, making it a possible target for attack.

Ukraine responded by saying all ships in the Black Sea heading for Russian ports would be viewed as carrying military cargo “with all the associated risks”.

The moves make it clear that a speedy resolution to the Black Sea grain deal is now impossible.

As we wrote earlier this week, while the amount of grain transported through the route was large, it was not hugely significant on a global scale.

The price rises on global markets reflect the certainty that this supply is not now coming back on any short timescale.

In the medium term, the lack of Black Sea trade will continue to hold grain prices higher than they otherwise would have been, but it will not lead to a surge like we saw last year.