Global Cereal Market Faces Instability Amid Geopolitical Tensions and Extreme Climate Events
As of March 2025, the global cereal market has been experiencing marked instability, fueled by geopolitical tensions and extreme climate events, according to a note published today by the National Agricultural Observatory (Onagri) on April 28, 2025.
In fact, the conflict in the Black Sea, with the war in Ukraine, continues to block wheat, corn, and barley exports, essential for many countries. The March strikes against port infrastructure have exacerbated the situation, causing price hikes and pushing trade towards other producers. Despite negotiations between the United States and Russia to reopen a maritime corridor, uncertainty persists.
Adding to these tensions are commercial disputes. American tariffs on imports from Canada, Mexico, and China have disrupted markets. In response, China has reduced its purchases of American corn and soybeans, favoring suppliers like Brazil, which has led to a price drop in the United States. This situation echoes the turbulence of the 2018 trade war.
In Europe, the EU has decided to reinstate taxes on certain Ukrainian agricultural products starting in June 2025, under pressure from farmers. This decision risks modifying commercial flows once again. Financial markets are reacting strongly to these political announcements, amplifying price volatility.
On the climate front, global harvests are suffering significant losses. Droughts in Russia, France, and Australia, floods in Europe and China, and heatwaves in India have reduced wheat, corn, and barley yields. In the United States and Argentina, prolonged droughts have hit corn, while in Brazil, excessive rainfall has complicated harvests.
According to the Onagri's "Céréveille" platform, prices are evolving differently depending on the type of cereal and region. Corn and soybeans are particularly affected by commercial tensions, while wheat remains highly sensitive to climate conditions.
Although global stocks remain sufficient, certain regions in Asia and Africa may soon face shortages. Forecasts remain uncertain, depending on geopolitical developments and climate hazards in the coming months.
