Chicago wheat futures jumped over 6% on Friday to hit their daily trading limit on deepening fears that Russia’s invasion of Ukraine will cause massive disruption to supply from two of the world’s top grain exporting nations.

Overnight news of a fire at a Ukrainian nuclear power plant as Russian forces seized control of the site added to investor jitters, sending share prices sliding.

Corn rose to its highest in nearly a decade, as the market also wrestled with the potential loss of millions of tonnes of Ukrainian corn exports.

Soybeans edged lower, pressured by improved growing conditions in South America and profit-taking in vegetable oil markets.

The most-active wheat contract on the Chicago Board of Trade (CBOT) (Wv1) was up by its 75-cent daily limit, or 6.6%, at $12.09 a bushel, a new 14-year high.

The contract had also ended Thursday’s session with a 75-cent limit-up rise.

So far this week the contract is up 40%.

On Euronext, spot March (BL2H2) set a new record high for the Paris-based futures market at 401.00 a tonne, reaching the 400-euro threshold for the first time.

“The demand for wheat on the physical market in (nearby) delivery is unprecedented, as buyers face delivery defaults for Black Sea origins,” consultancy Agritel said.

With Ukrainian ports closed and operators reluctant to trade Russian wheat in the face of Western financial sanctions, buyers are trying to find alternatives.

Algeria will allow suppliers to send French wheat in March, overturning a recent exclusion of France in its tenders, due to disruption to Black Sea supply, traders said on Thursday.

Russia and Ukraine account for about 29% of global wheat exports, 19% of corn exports and 80% of exports of sunflower oil, which competes with soyoil.

CBOT corn (Cv1) gained 1.6% to $7.59-1/2 a bushel, after earlier reaching its highest since October 2012 at $7.72.

CBOT soybeans (Sv1) edged down 0.5% to $16.58-3/4 a bushel.

The U.S. Department of Agriculture on Thursday said exporters sold 337,000 tonnes of U.S. corn to unknown destinations for delivery in the 2021/22 marketing year.

Some traders predict the Ukraine conflict could shift up to 300 million bushels (7.6 million tonnes) of additional corn demand to the United States, said Karl Setzer, a commodity risk analyst for AgriVisor.

U.S. President Joe Biden’s administration is studying whether waiving biofuel blending mandates could help offset a surge in prices for food ingredients such as corn and soyoil, sources said.

India will raise petrol and diesel prices next week for the first time in more than four months as global crude prices soar after Russia’s invasion of Ukraine last week, three government officials said, amid growing concern about inflation.

Asia’s third-largest economy, which imports 80% of its oil needs, faces retail inflation staying above the central bank’s tolerance limit of 6% as companies pass on a nearly 40% rise in crude prices since November, as well as rises in prices for other imported raw materials, economists said.

State-run oil companies, which control the domestic market, have not raised prices since Nov. 4, aiming to help Prime Minister Narendra Modi’s Bharatiya Janata Party in crucial state assembly elections including in the most populous state of Uttar Pradesh.

“The oil companies would be free to raise prices in a phased manner once the election is over on March 7,” a senior government official with the knowledge of internal discussions on oil prices told Reuters.

Higher fuel prices could lead to some protests but with the important state elections out of the way, the political risk for Modi has been reduced. Opposition parties will push for fuel tax cuts when parliament meets from March 14.

Oil prices surged after Russia invaded Ukraine on Feb. 24, with Brent rising above $116 a barrel on Thursday, while supply disruptions have hit global prices of wheat, soybean, fertiliser and metals like copper, steel and aluminium – raising worries about prices and economic recovery.

State oil companies have told the government that they need a price increase of 10-12 rupees per litre for petrol and diesel, a second official said.

A senior official at a state-run oil marketing company confirmed that they were facing difficulites though he declined to give figures.

“We are incurring huge losses,” the oil marketing company official said.

The government was unlikely to cut fuel taxes to soften the blow, at least before the March 31 end of the fiscal year, considering the impact of that on state revenues, said another senior government official, with knowledge of the budget.

The federal and state governments, which collect over 100% tax on the basic price of petrol and diesel, cut factory gate duties and sales tax on fuel products in November, after a public outcry.

“We may consider a proposal to cut fuel tax in April,” said the official with knowledge of the budget, referring to the cut in excise duties on petrol and diesel in November.

All three officials declined to be identified as the discussions are confidential.

The finance and oil ministries declined to comment.

GROWING INFLATION FEARS

Economists said a 10% rise in pump prices is likely to push retail inflation by 50-60 basis points through direct and second-order effects, prompting consumers to cut spending on durables and luxury products.

India’s retail inflation rose a seven-month high of 6.01% year-on-year in January, crossing the upper limit of the Reserve Bank of India’s (RBI) tolerance band, pushed by rising fuel and manufacturing prices.

Rising retail fuel prices would have a direct impact on prices of houehold goods and services depending on energy intensity, said Saugata Bhattacharya, chief economist at Axis Bank.

“However, the RBI’s Monetary Policy Committee (MPC) is unlikely to immediately start tightening monetary policy, given widespread multi-dimensional uncertainties on growth momentum.”

Asia liquefied natural gas (LNG) spot prices hit a record high of more than $59 per million British thermal units (mmBtu), tracking a surge in European gas prices on concern over tight supply after Russia’s invasion of Ukraine.

Price agency S&P Global Commodity Insights’ Japan-Korea-Marker (JKM), which is widely used as a spot benchmark in the region, climbed to $59.672 per mmBtu on Thursday, its data showed.

Its previous record was in October 2021, when it hit $56.326/MMBtu.