The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR [Mintec Code: WROF] was assessed at €220.00/mt, up €2.00 week-on-week (w-o-w) on 8th June, 2023. This week the price increase was attributed to growing tensions (and major uncertainty) between Russia and Ukraine amid the destruction of the Nova Kakhovka dam in Ukraine and below-normal precipitation in the US.
On Tuesday 6th June, the Nova Kakhovka hydroelectric power station on the Dnipro River was blown up, causing widespread flooding and disruption to infrastructure in southern Ukraine, which put thousands of people at risk. A Mintec source commented, “people who live on the riverbank and fields in Kherson oblast that was irrigated will suffer, and there will be nothing to irrigate the fields with.” The loss will be insignificant for grains and oilseeds as it is mainly vegetables grown in that area. Also, as this is Russia’s occupied region, there will be no impact on the current Ukrainian grain exports, according to market players. A Mintec source noted, “the dam could affect the cooling of a Zaporizhzhia nuclear power plant which at this point is a much bigger problem. We continue to monitor the news.” The Nova Kakhovka water reservoir is important for cooling nuclear reactors of the Zaporizhzia nuclear plant and it provides water to irrigation systems. According to the International Atomic Energy Agency, there is no current safety risk at the Zaporizhzhia nuclear plant. Nevertheless, the tragic situation poses a serious threat not only to people and animals, but also to logistics and agricultural storage facilities.
Reports also suggest that Russia has damaged its ammonia pipeline, which was a key part of the Russian side's demands for the continuation of the grain corridor deal.
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