Global grain market outlook: Hormuz, the Sea of Azov and China’s soybean commitment

Global grain markets are facing a complex set of challenges, primarily due to the closure of the Sea of Azov, restricted trade through the Strait of Hormuz, and China's soybean commitments. The Sea of Azov closure could lead to a loss of up to 6.5 million metric tons of Russian wheat export potential in the second half of 2026, with MENA importers bearing the brunt of the impact.

Meanwhile, restricted trade through Hormuz is constraining Gulf fertiliser exports, though Saudi Arabia and the UAE have largely rerouted grain imports. Meanwhile, China's US soybean purchases have yet to meet the 25 million metric ton target agreed in October 2025, creating uncertainty around new-crop pricing. The Strait of Hormuz disruption is causing different responses from Gulf grain and fertiliser shipments.

Iran continues to receive vessels at Bandar Imam Khomeini, its primary grain port, while Saudi Arabia and the UAE have rerouted their grain imports through Yanbu on the Red Sea and Fujairah, respectively. Iraq, on the other hand, has no alternative to the Strait of Hormuz, leading to only a handful of grain vessels reaching the country since early June.

Finally, a backlog of laden vessels in the Gulf has cleared following the US-Iran memorandum of understanding, but limited loading tonnage heading into August risks halting production if vessels do not enter the Gulf to load.