Food supplies at risk as Russia quits grains deal

STORY: World food supplies could be in peril again.

That's after Russia pulled out of a U.N.-brokered deal to export grains through the Black Sea.

The move leaves many cargo vessels in limbo, unsure of their next move.

Grain prices surged Monday (October 31) as a result.

Chicago wheat futures were up over 5%.

Moscow suspended participation in the U.N. deal after what it said was a major Ukrainian attack on its naval forces in the area.

No ships passed through the agreed corridor on Sunday (October 30).

However, the U.N., Ukraine and Turkey - the other three parties to the deal - want to keep cargoes flowing.

They’ve agreed a plan to move 16 ships on Monday.

Inspection of vessels in Istanbul also continues, but without Russian participation.

Speaking Monday, Turkish President Tayyip Erdogan said he would press ahead:

"By helping to establish a joint mechanism in Istanbul, we reduced the food crisis by putting 9.3 million tonnes of Ukrainian grain at the world's disposal. Even if Russia behaves hesitantly because it didn't receive the same benefits, we will continue decisively our efforts to serve humanity."

Even so, traders warn that the situation remains very uncertain.

That raises fears that global grains prices could again soar, fuelling inflation and threatening supplies to many nations.

Earlier this year, global wheat prices hit all-time highs due to the conflict in Ukraine.

Corn prices touched a ten-year top.

Now other suppliers, such as Australia, may struggle to fill the gap for wheat buyers in Asia.

Experts say cargo capacity is all booked up until February.

In Europe the big concern will be corn, with this the peak season for Ukrainian supplies of the grain.