Russia Halts Deal Allowing Ukraine To Export Grain, In A Hit To Global Food Security

Russia Halts Deal Allowing Ukraine To Export Grain, In A Hit To Global Food Security

By Spy Uganda

Russia said Monday that it has halted an unprecedented wartime deal that allows grain to flow from Ukraine to countries in Africa, the Middle East and Asia where hunger is a growing threat and high food prices have pushed more people into poverty.

Kremlin spokesman Dmitry Peskov announced that Russia would suspend the Black Sea Grain Initiative until its demands to get its own agricultural shipments to the world are met. While Russia has complained that restrictions on shipping and insurance have hampered its agricultural exports, it has shipped record amounts of wheat.

“When the part of the Black Sea deal related to Russia is implemented, Russia will immediately return to the implementation of the deal,” Peskov said.

It’s the end of a breakthrough accord that the United Nations and Turkey brokered last summer to allow food to leave the Black Sea region after Russia invasion of its neighbor worsened a global food crisis. The initiative is credited with helping lower soaring prices of wheat, vegetable oil and other food commodities.

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Ukraine and Russia are both major global suppliers of wheat, barley, sunflower oil and other affordable food products that developing nations rely on.

The grain deal provided assurances that ships wouldn’t be attacked entering and leaving Ukrainian ports, while a separate agreement facilitated the movement of Russian food and fertilizer. While Western sanctions do not apply to Moscow’s agricultural shipments, some companies may be wary of doing business with Russia because of the measures.

Ukrainian President Volodymyr Zelensky’s advisor, Mykhailo Podolyak, said that the suspension was expected and that he believed it to be political theater.

“The statement itself immediately includes an escape clause,” he said. “Therefore, we are dealing with classic public techniques of the Russian Federation that no longer require significant reciprocal reactions.”

Turkish President Recep Tayyip Erdogan said that the country’s foreign minister would speak with his Russian counterpart Monday — and that he was hopeful the deal would be extended.

The war in Ukraine sent food commodity prices surging to record highs last year and contributed to a global food crisis also tied to conflict, the lingering effects of the COVID-19 pandemic, droughts and other climate factors.

High costs for grain needed for food staples in places like Egypt, Lebanon and Nigeria exacerbated economic challenges and helped push millions more people into poverty or food insecurity.

People in developing countries spend more of their money on meals. Poorer nations that depend on imported food priced in dollars also are spending more as their currencies weaken and they are forced to import more because of climate issues. Places like Somalia, Kenya, Morocco and Tunisia are struggling with drought.

Prices for global food commodities such as wheat and vegetable oil have fallen, but food was already expensive before the war in Ukraine, and the relief hasn’t trickled down to kitchen tables.

“The Black Sea deal is absolutely critical for the food security of a number of countries,” and its loss would compound the problems for those facing high debt levels and climate fallout, said Simon Evenett, professor of international trade and economic development at the University of St. Gallen in Switzerland.

He noted that rising interest rates meant to target inflation as well as weakening currencies “are making it harder for many developing countries to finance purchases in dollars on the global markets.”

The U.N. Food and Agriculture Organization said this month that 45 countries need outside food assistance, with high local food prices “a driver of worrying levels of hunger” in those places.

The Black Sea Grain Initiative has allowed three Ukrainian ports to export 36 million tons of grain and other food to the world, more than half of that to developing nations, according to the Joint Coordination Center in Istanbul.

But the deal has faced setbacks since it was brokered by the U.N. and Turkey: Russia pulled out briefly in November before rejoining and extending the deal.

In March and May, Russia extended the deal for only 60 days, instead of the usual 120. The amount of grain shipped per month fell from a peak of 4.6 million tons in October to 1.4 million tons in May, the lowest volume since the deal began.

Exports expanded in June to a bit more than 2.2 million tons, thanks to larger ships able to carry more cargo.

Meanwhile, Russia’s wheat shipments hit all-time highs following a large harvest. It exported 50.2 million tons in the 2022-23 trade year, with another record of 52.4 million tons expected in 2023-24, according to U.S. Department of Agriculture estimates.

The 2022-23 total is more wheat than any country ever has exported in one year, said Caitlin Welsh, director of the Global Food and Water Security Program at the Center for Strategic and International Studies.

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