“Wheat surged to the highest price in more than a year…”
Priced in gold and stocks, wheat is near multi-decade lows. That may not last.
– Ukraine Unrest Intensifies as Toll Rises From East Offensive (Bloomberg, May 6, 2014):
Surging casualties are threatening to undermine Ukraine’s campaign to regain ground from pro-Russian militants in its easternmost cities, where insurgents killed four government troops and downed a military helicopter.
Government forces yesterday had four deaths in fighting that may have killed about 30 rebels, acting Interior Minister Arsen Avakov said on his Facebook account. He said there were “many Crimeans” in the area, as well as Russians and Chechens.
“The slow pace of the anti-terrorist operation is due to the fact that we are trying to ensure the safety of citizens and prevent civilian casualties,” acting President Oleksandr Turchynov told German Chancellor Angela Merkel during a telephone conversation yesterday, according to a statement posted on the Ukrainian parliament’s website.
Efforts by the government in Kiev to expel insurgents from the easternmost regions are at risk of stalling less than three weeks before the country’s presidential election. Merkel and U.S. President Barack Obama have set the May 25 vote as the trigger for possible economic sanctions against Russia if it fails to pull back its support for separatists.
More than 30 administration buildings, police stations, security-services offices and other installations are currently blocked by rebels in the eastern Donetsk and Luhansk regions, the Interior Ministry said yesterday. The government also sent specialized security units to the southern city of Odessa while neighboring Moldova put its borders on alert.
The turmoil drove the yield on Ukrainian government debt due in 2023 up one basis points, or 0.01 percentage point, to 10.79 percent yesterday, the highest since March 17, data compiled by Bloomberg show. The yield on the 10-year Russian government bond rose six basis points to 9.55 percent, according to generic data compiled by Bloomberg.
Wheat surged to the highest price in more than a year as violence in Ukraine intensified concerns of supply disruptions. Russia and Ukraine are expected to rank fifth and sixth among the world’s biggest wheat exporters in the 2013-14 season, according to the International Grains Council.
The U.S. and its allies say Russian President Vladimir Putin is trying to destabilize Ukraine before the election. The North Atlantic Treaty Organization says Russia has about 40,000 troops along the Ukrainian border. Four European Union and NATO members share a border with Ukraine: Hungary, Poland, Romania and Slovakia.
Canadian Prime Minister Stephen Harper yesterday accused Russia of gradually taking over Ukraine. Canada, a NATO member, has contributed air, navy and army assets to the alliance’s effort to reassure east European allies, he said.
“We are obviously concerned by the continuing escalation of violence in Ukraine, which to me very much appears to be what I would call a slow-motion invasion on the part of the Putin regime,” Harper said in Ottawa before meeting U.S. Air Force General Philip Breedlove, the supreme commander of NATO.
In eastern Ukraine yesterday, the pilots of a military helicopter survived after the aircraft was hit with machine-gun fire and crashed into a river near Slovyansk in the Donetsk region, the Defense Ministry said on its website.
Insurgents have now shot down three helicopters since May 2, with another damaged in an attack.
Citing the turmoil in Ukraine, the government of Moldova put its borders on alert and assigned law enforcement to ensure public order, the government announced on its website. Moldova, whose border is less than 50 kilometers (31 miles) from the violence-wracked Ukrainian city of Odessa, said it supports Ukraine’s sovereignty and territorial integrity.
In Odessa, 42 people were killed and 125 injured May 2 after Russian sympathizers took refuge in a building that was later engulfed by fire. They were seeking to escape fighting between soccer fans and supporters of the Kiev government on one side and Russia backers on the other. Seventy-eight people remain hospitalized in the city, RIA Novosti reported yesterday.
Ukraine sent special forces to Odessa after dismissing the local police following the fire. Fighting in the city of 1 million is taking place about 160 kilometers from the European Union’s southeastern frontier in Romania. It’s also Ukraine’s most important conduit to the Black Sea after Russia took control of Crimea.
A “humanitarian catastrophe” is looming in Ukrainian cities blockaded by the military as people are beginning to suffer from shortages of food and medicine, the Russian Foreign Ministry said in a statement yesterday. Authorities in Kiev are “continuing to wage war against their own people,” it said.
Russia’s Foreign Ministry submitted a report to Putin summarizing human-rights violations in Ukraine since the end of November, the Kremlin said on its website yesterday. The facts presented in the report suggest that abuses in Ukraine have become widespread, according to the statement.