Nova Kakhovka dam collapse propels global wheat prices

World wheat prices rose in the early hours of Tuesday following reports of an explosion at the Kakhovka hydroelectric power station.

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Wheat cost about USD 6.4 per bushel, or 3 percent higher, according to Barchart Trader.

Nova Kakhovka dam collapse propels global wheat prices

"Wheat went up by three percent – that's how the markets reacted to the explosion of the Kakhovka hydroelectric power station," said Oleh Nivievskyi, vice president for economic education at the Kyiv School of Economics.

The wheat markets are waiting for an escalation, he added.

In particular, Chicago wheat climbed over two percent to almost a three-week high, Reuters reported.

Russia blew up the Kakhovka hydroelectric power plant overnight on Tuesday, leading to the breach of the dam and unleashing floodwater across the downstream area.

Apart from millions of litres of water bursting through the breached dam in southern Ukraine, wheat prices are being pushed up by concerns over the dry weather in parts of Europe and Russia.

"With funds heavily short in wheat and corn, we may expect a volatile trade ahead," brokerage Copenhagen Merchants said in a note.

Last month, wheat prices on the global market creeped to a six-month high against the backdrop of the drone attacks on the Kremlin.