Tue Vuong had secured four cargoes of wheat harvested from fertile lands around the Black Sea, roughly a fifth of what his milling company 5,000 miles away in Vietnam uses annually. Then he was told it wouldn’t get shipped following a summer escalation in Russia’s war with Ukraine.
“I was very panicked,” said Vuong, chief executive officer of Golden Wheat in Ho Chi Minh City. He was offered replacements for two of his cargoes with wheat from Bulgaria, but with a gap in his supplies, he spent weeks frantically searching for more. “We were too exposed to a crisis in the Black Sea.”
The world’s attention has been on the Strait of Hormuz and spiking oil prices because of the conflict in the Middle East. But the impasse in the Black Sea is compounding the economic damage by threatening to drive inflation even higher while undermining food security in vulnerable countries. Bond investors say food supply risks aren’t yet fully priced into a market more focused on the cost of things like energy.
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