The Russia-Ukraine War has triggered a global food crisis. The food competition has intensified, with soaring freight rates for small and medium-sized bulk carriers and daily rentals surging to more than $30,000.

Russia and Ukraine are the world's largest and fifth-largest wheat suppliers. Together, the two countries account for nearly 30% of global exports, mainly exports from the Black Sea to the Mediterranean, the Middle East, South Asia, and other places. India is the second-largest wheat supplier. The countries initially hoped that Indian wheat would fill the gap, but the recent Indian drought affected the harvest. Therefore, India even banned wheat exports, exacerbating the crisis.

In such a situation, grain importing countries continue to turn to other countries to compete for food supplies. It is pointed out that this may have four major effects. The first one is that the voyage will lengthen due to rerouting, pushing up freight rates; second, countries competing for food supplies will have a crowding-out effect; third, driving up related food rising in price, intensifying inflation; fourth, the rise of food protectionism.

For example, the original purchase of wheat from India, such as Egypt and other African countries, may change to South America, the United States, Australia and other places to import. Still, the central United States drought and too much rainfall in the north might affect wheat production and exports.

The Russia-Ukraine war also pushed up food protectionism. In addition to India's wheat ban, Indonesia has also stopped palm oil exports. Serbia, Kazakhstan and other countries are to implement a quota system for food transportation.

According to the latest forecast, the total trade volume of grains (soybeans/wheat/corn, etc.) this year is about 503 million tons, down 4% from last year, with wheat and corn down 8% and Ukrainian wheat estimated to be down a whopping 75%.

Grain is mainly shipped via small and medium-sized bulk carriers. For bulk carrier companies, grain production decreased, and prices rose, which may reduce the demand for ship transportation. However, the current ships are still in short supply, coupled with higher freight rates. The second quarter was in the peak season earlier than last year and the third quarter is the traditional peak season. The overall view of this year is still very optimistic.