The World Bank now says prices for key grains and oilseeds increased slightly after Russia declined to renew the Black Sea Grain Initiative.

In its recent food security update, the lender says wheat futures jumped only three per cent on July 17 but remained well below peak levels of the previous year.

“Similarly, corn and soybean futures surged before returning to pre-announcement levels,” World Bank says.

It attributes the mild shock to markets’ anticipation of Russia's move because of ongoing geopolitical tensions.

“Grain markets therefore exhibited minimal immediate response to Russia's withdrawal, hence global commodity markets are still relatively favourable,” the bank said in an update.

On July 17, Russia announced its decision not to renew the grain deal which guaranteed safe transportation of foodstuffs from the Ukrainian Port through the black sea.

The move sent panic in the grain commodity market, mostly in import reliant countries such as Kenya which depends on Ukraine for its cereal imports such as wheat.

Apart from wheat, Kenya also imports iron and steel, an assortment of cereals, edible vegetables, vegetable fats and oils and cleavage products from Ukraine.

Millers said it is yet too early to ascertain the full impact of Russia’s move on commodity prices.

However, analysts and manufacturers have warned it will have implications.

Cereal Millers Association chief executive Paloma Fernandes said although it is early to tell the implication, the country should adopt a wait and see attitude.

Wheat floor prices for instance, have been retailing at a range of Sh190 to 215 in the past two months across various retail stores in Kenya's capital.

FAO’s Agricultural Market Information System Market Monitor, July edition, projected improved wheat production prospects in several countries this year, including Canada, Kazakhstan and Turkey which is likely to see wheat prices ease in coming months.

Maize production forecasts remained nearly unchanged, and still pointing to a rebound, surpassing the 2022 level by 4.2 per cent.

The monitor further projected rice production in 2023/24 to rise fractionally month-to-month, reflecting a few small upward adjustments to output figures for producers.

On the other hand, soyabean production was trimmed from the previous month, with a lower forecast for the US more than offsetting upward revisions for Brazil, India and Zambia.