LONDON: Fears are growing that Russia will not extend a United Nations-brokered deal allowing grain to flow from Ukraine to parts of the world grappling with hunger, as ships no longer go to the war-torn Black Sea country’s ports and food exports dwindle. .
Turkey and the United Nations negotiated the breakthrough deal last summer to ease the global food crisis, along with a separate agreement with Russia to facilitate shipments of food and fertilizer. Moscow insists it still faces hurdles, even though data shows it is exporting record amounts of wheat.
Russian officials say repeatedly that there are no reasons to extend the Black Sea Grain Initiative, which is due to be renewed for the fourth time on Monday. They threatened before – and then twice extended the deal by two months instead of the four months specified in the agreement.
The United Nations and others are scrambling to keep the shaky deal intact, with both Ukraine and Russia the main suppliers of wheat, barley, vegetable oils and other food products that countries in Africa, the Middle East and parts of Asia depend on. It allowed Ukraine to ship 32.8 million metric tons (36.2 million tons) of grain, more than half of it to developing countries.
The deal helped lower global prices of food commodities such as wheat after they jumped to record levels following the invasion last year, but that relief has not reached the kitchen tables.
Russia’s exit would cut off the WFP’s source of aid to countries at risk of famine, including Somalia, Ethiopia and Afghanistan, and compound food security problems in vulnerable places reeling from conflict, economic crisis and drought.
“Russia has a great deal of good public will to continue this agreement,” said Joseph Glauber, senior research fellow at the International Food Policy Research Institute. “There will be a cost to be paid in terms of public perception and global goodwill, I think, with respect to Russia” if the deal is not extended.
The amount of grain leaving Ukraine has already fallen, with Russia accused of slowing down joint inspections of ships by Russian, Ukrainian, UN and Turkish officials and refusing to allow more ships to join the initiative.
Average daily inspections – aimed at making sure ships were carrying only food and not weapons that could help either side – fell from a peak of 11 in October to just over two in June.
This has led to a drop in grain exports, from 4.2 million metric tons in October to 1.3 million in May, which is low for the old initiative. It rose to 2 million in June as shipment volumes grew.
If the agreement is not extended, Caitlin Welch said, “countries that depended on Ukraine for their imports will have to look at other sources of imports, very possibly Russia, which is something I imagine Russia was intending.” Director of the Global Food and Water Security Program at the Center for Strategic and International Studies.
The United Nations is negotiating with Russia, said UN spokesman Stephane Dujarric on Wednesday, as Secretary-General Antonio Guterres sent a letter to Russian President Vladimir Putin this week regarding further implementation of the Moscow agreement.
UN Trade Coordinator Rebecca Greenspan told reporters that the UN proposal includes finding a way to enable Russia to carry out global financial transactions for its food and fertilizer shipments.
Greenspan wanted to go to Moscow this week to push for a renewal of the deal, but when asked if she would go, she replied: “It doesn’t look like it.”
Meanwhile, Ukrainian President Volodymyr Zelensky said he expected new arms pledges from Western allies to “disrupt” the initiative.
“It is understandable: Russia always behaves this way, does not keep its promise and wants to close certain humanitarian corridors to create a new crisis,” he said after the NATO summit in Lithuania.
Ukraine’s Ministry of Infrastructure says 29 ships were waiting in Turkish waters because Russia refused to allow them to be searched.
Russia insists the agreement has not worked for its exports, blaming Western sanctions.
While the sanctions do not affect food and fertilizer, Moscow is seeking reductions from restrictions on Russia’s agricultural bank, as well as the transportation of ammonia, a key ingredient in fertilizer, to a Ukrainian Black Sea port. But the United Nations said the ammonia pipeline was damaged in the war.
“There is still time to implement the part of the agreements that belongs to our country. So far, this part has not been fulfilled,” Kremlin spokesman Dmitry Peskov told reporters last week. “And so at the moment, unfortunately, we do not see any particular reasons for extending this deal. .”
However, Russia increased its wheat exports to an all-time high after a great harvest. It amounted to 45.5 million metric tons in the 2022-2023 trade year, according to estimates on Wednesday from the US Department of Agriculture. It expects another record for Russia in 2023-2024, with 47.5 million metric tons.
Meanwhile, shipments to Ukraine are down more than 40 percent from their pre-war average, with the US Department of Agriculture forecasting 10.5 million metric tons of wheat next year — a major blow to its agriculture-dependent economy.
Peter Meyer, head of grain analytics at S&P Global Commodity Insights, said that with less Ukraine and more Russia, the world’s available wheat stocks are the same in 2021 — and there’s more than enough of them to go around.
Europe and Argentina are expected to boost wheat shipments, while Brazil had a standout year for corn, of which Ukraine is also a major supplier. Meyer will expect nothing more than a temporary rise in grain prices on world markets if the Black Sea Deal is not renewed.
“Markets adjust very quickly,” he said. “The fact of the matter is that global grain markets balance each other out.”
Ukraine can send its food by land or river across Europe, so it won’t be completely cut off from selling grain, but those routes have less capacity than sea shipments and have fueled division in the EU.
“We’re a cat running out of breath in this situation,” said Simon Event, professor of international trade and economic development at the University of St. Gallen in Switzerland. “It only takes one thing to go wrong before we get in trouble.”
While the food price index for the Food and Agriculture Organization of the United Nations has fallen below the record levels set when Russian forces entered Ukraine, food costs were already high due to COVID-19, conflict and drought.
Then the Russian war helped raise the costs of food production — including energy, fertilizer, and transportation.
In developing nations that are increasingly dependent on imported food, from Kenya to Syria, weak currencies keep domestic prices high because they are paid in US dollars.
Shashuat Sarraf, IRC Regional Committee, said: “With nearly 80 percent of grain in East Africa exported from Russia and Ukraine, more than 50 million people across East Africa face hunger, and food prices have risen by about 40 percent this year. general”. Emergency Director for East Africa.
“It is vital for the international community not only to reach a long-term agreement but also to build durable solutions to address food insecurity,” he said.