EXPLANATOR: What Russia's suspension of the grain deal could mean

EXPLANATOR: What Russia’s suspension of the grain deal could mean

NAIROBI, Kenya (AP) — Russia has suspended its part of a UN-brokered deal allowing Ukraine to safely export grain from its Black Sea ports during a month-long warsaying he would not allow ships to travel.

Ukraine said a dozen ships sailed on Monday after initially reporting that more than 200 ships, many loaded and ready to travel, were stranded following Russia’s weekend announcement.. Later in the day, the Russian Defense Ministry said maritime traffic had been suspended, calling the move “unacceptable” after Moscow alleged a Ukrainian drone attack on its Black Sea Fleet.

These exports are crucial: Ukraine and Russia are the world’s main suppliers of wheat, barley and sunflower oil and other foodstuffs to countries in Africa, the Middle East and parts of Asia where many are already struggling with hunger.

Here’s what Russia’s move could mean for a world increasingly concerned about food security and high food prices:


The grain initiative is a rare example of cooperation between Ukraine and Russia since the Russian invasion in February. Sponsored by the United Nations and Turkeyit allowed more than 9 million tons of grain in 397 ships to safely leave Ukrainian ports.

The grain deal has lowered world food prices around 15% from their peak in March, according to the UN, and the UN secretary-general had urged Russia and Ukraine to renew the deal when it expires on November 19.

Following Russia’s announcement, wheat futures prices jumped 5% on Monday in Chicago. With tight global marketspoorer countries will have to pay more to import grain, said Joseph Glauber, a senior fellow at the International Food Policy Research Institute in Washington.

Before the grain deal was negotiated, the United States and Europe have accused Russia of starving vulnerable regions of the world by refusing exports. Since the deal, Russian President Vladimir Putin has alleged that most grain exported was going to Europe instead of the hungriest nations in the world.

UN humanitarian chief Martin Griffiths said 23% of total goods exported from Ukraine under the grains deal went to lower- and lower-middle-income countries and 49% of all wheat shipments went to these countries.

Ukraine said more than 5 million tons were exported to African and Asian countries, with 190,000 tons of wheat sent to countries that receive aid from the United Nations World Food Programme..


A ship carrying 30,000 tons of wheat for Ethiopia under the program sailed on Monday, Ukraine said, one of 12 ships carrying more than 354,000 tons of agricultural products that Ukraine says left the port after the UN and Turkey agreed on the trafficking of ships via humanitarian aid. corridor. Ethiopia, along with neighboring Somalia and Kenya, are hard hit by the region’s worst drought in decades.

Russia’s UN ambassador Vassily Nebenzia told an emergency meeting of the UN Security Council convened by Moscow on Monday that “the Black Sea remains a zone of hostilities” and “we we cannot permit the unimpeded passage of ships without our inspection”.

Nebenzia said Russia opposes the decision by the UN, Ukraine and Turkey to allow the ships to pass without Russian inspection. Moscow would soon reveal measures to control what was allowed “without our consent”, he added.

William Osnato, senior research analyst at agricultural data and analytics firm Gro Intelligence, said ship tracking maps show no ships heading for Odessa.


Russia has offered to provide up to 500,000 tonnes of grain for free “to the poorest countries over the next four months”. The Russian Defense Ministry stressed that Russia was not withdrawing but was suspending the grain deal.

Although sanctions against Russia do not affect its grain exports and a wartime side deal was intended to pave the way for food and fertilizer shipments from Moscow, some companies have been wary.

Developing countries will have to find new grain suppliers and pay more in countries like the United States, Argentina and Australia where dry conditions or rain are a problem, said Glauber, a former chief economist. of the United States Department of Agriculture. But high prices mean growers will plant more, and those that aren’t typically big wheat exporters, such as Brazil and India, have increased shipments.

“What the world needs are really big harvests,” he said, and with Ukraine accounting for 10% of global wheat exports, “that’s a big hole” to fill.


Peter Meyer, head of grains and oilseeds analysis at S&P Global Platts, said he doubts Russia’s move will have a lasting impact on the price and supply of corn and grains. Commodity traders were skeptical about the length of the deal, he said, one of the reasons corn prices have risen, not fallen, since the deal was struck in July.

Grain markets are also focused on other issues, Meyer said, including low water levels in the Mississippi River that are slowing the export of U.S. agricultural products, a disappointing corn crop in the U.S. West and the threat of an American railroad strike..

But in parts of the African continent, where prices have remained highconcerns resurface.

“It will send another mini-shockwave through the markets, and I think it will push prices up for a while,” said Shaun Ferris, Kenya-based agriculture and markets adviser for Catholic Relief Services, a partner of the United Nations. World Food Program distributions. “This means that prices in East Africa, at record highs, are not going to come down any time soon.”

After four failed rainy seasons in the Horn of Africa, millions of people are going hungry and millions of cattle that are a vital source of food and wealth are dying. Ferris said he has spoken with companies that send hundreds of tonnes of processed food to northern Kenya to keep animals alive.

The latest setback for Ukrainian exports is another source of stress, he said.

In the poorer countries of North Africa and the Middle East where bread is an essential part of people’s diets, there may not be alternative staples like rice in Asia or sorghum elsewhere in Africa, Glauber said. It raises the specter of unrest in places where bread prices fueled Arab Spring uprisings.

In Egypt, the world’s largest wheat importer, President Abdel Fattah el-Sisi personally visited wheat farms when harvesting began this spring. But an economic crisis made it more difficult to buy imported wheat as the Egyptian currency hit a historic low against the US dollar.

“The wheat is out there, but it’s going to come at a high price,” Glauber said.


Bonnell reported from London. AP reporters Paul Wiseman in Washington, Hanna Arhirova in Kyiv, Ukraine, and Edith M. Lederer at the United Nations contributed.


Follow all of AP’s food crisis coverage at https://apnews.com/hub/food-crisis and the war in Ukraine at https://apnews.com/hub/russia-ukraine.

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