Escalation of the Black Sea Grain War and the Politicization of the Baltic Sea Route: An Assessment of Grain Procurement Risks for South Korea and East Asia
Executive Summary
The mutual destruction of grain infrastructure in the Black Sea has become a constant feature of the conflict, as Ukraine strikes Russia’s Novorossiysk Black Sea Fleet base, grain terminals, and oil and logistics facilities, prompting Russian retaliatory attacks on Ukrainian ports and grain infrastructure. Despite a bumper crop this year, Ukraine's export capacity is languishing at just 40% of normal levels due to the blockade of its sea lanes. Meanwhile, Russia's efforts to reroute its grain exports through Baltic Sea ports have sparked trade friction with the Baltic states, including Latvia. The International Grains Council (IGC) has revised its 2026/27 global grain production forecast downward, indicating that these supply disruptions are now being reflected in official statistics. South Korea is highly vulnerable to rising international grain prices and supply chain instability due to its significant reliance on the Black Sea region for feed grains such as wheat and corn. This makes it imperative for the country's grain processing, feed, and food industries to secure alternative suppliers and review their hedging strategies. Other major East Asian grain importers, including Japan and China, are expected to face similar pressures from rising procurement costs. Should the trade restrictions emanating from the Baltic states become protracted, a restructuring of the regional grain procurement framework will likely be unavoidable.
I. Analysis of the Current Situation
The Black Sea Grain War: Escalating Mutual Strikes and the Politicization of the Baltic Sea Route
1. Background and Developments
Since the outbreak of the war in 2022, the Black Sea has remained a source of volatility for global wheat and corn markets, marked by the signing and subsequent collapse of the Black Sea Grain Initiative (BSGI). In the summer of 2026, the situation entered a new phase. On August 12, Ukrainian forces launched a large-scale attack on the Black Sea Fleet base in Novorossiysk, Krasnodar Krai, using drones, missiles, and unmanned surface vessels. Multiple naval vessels, including two frigates, were damaged, and two major grain export terminals were forced to halt operations in the process [3]. President Zelenskyy described it as a “unique” operation [3]. Subsequently, on the night of September 8–9, long-range drones struck the same base again, targeting naval port facilities, a fuel terminal, and a vessel carrying Kalibr missiles. Novorossiysk is a key hub to which Russia’s Black Sea Fleet has relocated its vessels after finding it difficult to maintain a secure presence in Crimea.
Russia immediately repeated its pattern of retaliation. In late July, Russian forces had also attacked Ukrainian food export facilities [2]. Later, on August 21–22, Ukraine struck oil refineries in Perm and Samara and an Ozon logistics center. President Putin described this as opening a ‘Pandora’s box’ and vowed retaliation against vulnerable sectors of the Ukrainian economy [7]. This has entrenched a structure of mutual escalation involving tit-for-tat strikes on grain and energy infrastructure.
Meanwhile, farmers in the southern Odesa region of Ukraine are reporting their best harvest since the invasion began this year [16]. However, with the Black Sea routes effectively blockaded, they have no viable way to ship their harvested grain. According to the Ukrainian Ministry of Agrarian Policy and Food, agricultural exports via road, rail, and the Danube River increased in September compared to August, but still only reached 40% of normal capacity [14]. In September, 630,000 tons of agricultural products were exported, with grain accounting for more than half of that, at 380,000 tons [14].
2. Current Situation
Russia is also shifting its grain export routes from the Black Sea to the Baltic Sea. The Latvian media outlet Delfi reported that as Ukraine has systematically destroyed Russian grain export infrastructure in the Black and Azov Seas, Moscow has increased its reliance on Baltic Sea ports as an alternative route [5]. This trend escalated into a domestic political issue in Latvia within just a few weeks [5]. Latvian farmers are protesting that their own country's ports are prioritizing the transshipment of Russian grain while refusing to accept their domestic agricultural products [5].
In response, the Latvian government amended its border control regulations in early September to authorize the Food and Veterinary Service (PVD) to conduct customs inspections on food grains not intended for distribution within the EU. Grains suspected of originating from occupied Ukrainian territories were also included in the scope of these inspections [12]. Subsequently, on September 10, the Latvian parliament (Saeima) passed a bill as an ‘urgent’ matter, expanding the ban on imports of agricultural products from Russia and Belarus from feed and agricultural goods to all foodstuffs [9]. Reports of a potential tariff of up to 300% are in line with this broader move by the Baltic states, including Latvia and Lithuania, to block the transshipment of Russian grain [5].
In its August 28 report, the International Grains Council (IGC) lowered its 2026/27 global grain production forecast by 5 million tons from the previous month to 2.416 billion tons. This was due to a second consecutive monthly downward revision of the EU production forecast, driven by continued high temperatures in Europe [6]. The global consumption forecast was also lowered by 3 million tons from the previous month to 2.444 billion tons, reflecting adjustments in demand for animal feed [6]. Logistical disruptions from the Black Sea blockade and adverse weather factors are converging, creating simultaneous downward pressure on the supply side.
Some signals are already being detected in Latvia's domestic prices. Latvia's statistics office announced that while inflation in August was driven by price increases in the transport sector, including fuel, food prices for items like potatoes, cheese, bread, and coffee actually fell [18]. This suggests that the grain transshipment conflict has not yet translated into a noticeable impact on final consumer prices in Latvia. However, local industry experts are concerned that if tariffs are imposed, an increase in raw material procurement costs for feed and food processing companies in the three Baltic states will be inevitable.
Meanwhile, the physical risks associated with the Black Sea shipping routes continue to grow. On September 11, the Russian Ministry of Defence announced that it had struck three cargo vessels near the ports of Chornomorsk and Odesa [19]. As Ukraine was reported to have attacked an Iranian vessel, some European media outlets suggested that this incident raises the possibility of the war becoming regionalized and internationalized [15].
3. Key Actors and Positions
The Ukrainian Government and Agricultural Sector: The Zelenskyy government is pursuing a strategy of simultaneously targeting Russian naval infrastructure and grain export terminals to secure both military pressure and negotiating leverage [3][11]. Farmers in the Odesa region, on the other hand, face the dual hardship of a record harvest coupled with an inability to sell their crops due to the export blockade [16]. The Ministry of Agrarian Policy and Food is responding by expanding alternative routes via land, rail, and the Danube River, but operational capacity remains at only 40% [14].
The Russian Government: Moscow is responding to Ukraine’s Novorossiysk strike with retaliatory attacks on oil refineries and logistics networks, while also exploiting gaps in the Western sanctions regime by rerouting its own grain exports through Baltic Sea ports [5][7]. The EU’s 21st sanctions package against Russia focuses on crude oil and LNG transport and adds 41 vessels to its ‘shadow fleet’ sanctions list [10]. Although the criteria for sanctions designation include vessels transporting stolen Ukrainian grain, the fact that the trade of Russian-origin grain itself is not subject to sanctions works to Russia’s advantage.
Latvia and Lithuania: The three Baltic states are politicizing the use of their ports as transshipment hubs for Russian grain, framing it as an issue of both protecting their domestic farmers and ensuring the effectiveness of sanctions against Russia [5][9]. The bipartisan passage of emergency legislation by the Latvian parliament demonstrates a clear hardline public stance against Russia [9]. However, the port and logistics industries also have concurrent concerns about profitability due to the potential decrease in transshipment volumes.
The European Commission: Brussels has maintained a sanctions framework centered on crude oil and LNG [10], leaving the grain issue largely delegated to the border control and import ban measures of individual member states. The fact that the three Baltic states are individually strengthening tariff and customs measures demonstrates that a unified EU-level response has not yet been established.
International Grain Market Actors (e.g., IGC): The IGC has been successively revising its forecasts downward to reflect both the risks in the Black Sea and production disruptions caused by the European heatwave [6]. This suggests that the upward pressure on prices is the result of an overlap between the war-induced supply shock and climate-induced production declines.
4. Key Issues
The first issue is the duration of the Black Sea route blockade. If Ukraine’s export capacity remains stuck at 40% for a prolonged period, there is a risk that global market supply shortages could become structural due to the physical limitations of alternative land and river routes [14].
The second issue is the extent to which the Baltic Sea detour for Russian grain can be blocked. If the strengthened tariff and customs measures by Latvia and Lithuania prove effective, Russia will have to seek new alternative markets, which could in turn curtail the international distribution of Russian grain itself [5][9].
The third issue is the convergence of climate and war-related factors. The IGC’s downward revision of its production forecast shows that an independent variable—the European heatwave—is acting in concert with the supply shock from the Black Sea [6]. In a scenario where both factors overlap, it is highly likely that price volatility will not subside even if one of the individual factors is resolved.
The fourth issue is whether the mutual strikes on infrastructure will escalate further. The pattern of tit-for-tat strikes, stretching from Novorossiysk to Perm and Samara, is repeating [3][7], and the general consensus among local analysts is that the dynamic of both grain and energy infrastructure being targeted simultaneously is unlikely to be resolved in the near future.
References
[1] [Kyiv Independent] Global grain prices rise as Russia-Ukraine war escalates in Black Sea
[4] [Eurasia Group] EURASIA GROUP'S TOP RISKS FOR 2026
[5] [Delfi (LV)] Krievijas graudu plūsma caur Baltijas ostām. Latvija un Lietuva pastiprina cīņu
[6] [IGC (International Grains Council)] IGC Grain Market Report
[8] [Verisk Maplecroft] Climate Risk & Nature
[9] [LSM] Saeima moves toward grain transit sanctions on Russia, Belarus
[10] [Brookings - Health Policy] An update on Europe’s Russia sanctions
[12] [Delfi (LV)] Latvija pastiprinās Krievijas izcelsmes graudu kontroli
[15] [Børsen] Ukraine angriber iransk skib. Øger det risikoen for verdenskrig?
[16] [Kyiv Independent] 'We will sow' — Odesa farmers defiant in face of relentless Russian assaults
[17] [ABC News Australia] Russian strike on Ukraine-Poland border shows war at Europe's 'doorstep'
[18] [LSM] Latvian inflation ticked up in August
[19] [Gulf Daily News] Russia says it hits three cargo vessels near Ukrainian ports
[20] [Nikkei Asia] Commodity prices near 18-year high, threatening global inflation
[21] [Kyiv Independent] 2 Azerbaijanis killed in drone attack as Russia strikes ships in Black Sea
[22] [Agri-Pulse] Diesel hits new high, threatening farmers amid ‘energy crisis’
[24] [The Edge Malaysia] Opinion: In a global economic heatwave, beware financial wildfires
[25] [Times of Oman] Ukraine, Russia trade drone strikes, killing 6
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
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