Russia broke a deal that kept grain prices down around the world and saved millions of poor people from starvation. An overview of the importance worldwide.
Despite the Russian war of aggression, Ukrainian grain entered the world market for almost a year. This was made possible by an agreement between the war opponents, which Turkey and the United Nations were able to mediate. Now Russia has made good on its threat and stopped the agreement for the time being. The German farmers’ association speaks of a “political poker game in Russia”. What that means worldwide:
How much Ukrainian grain has been exported since the war broke out?
After the initial Russian blockade of Ukraine’s Black Sea ports, the deal has allowed Ukraine to export around 33 million tons of grain since August 2022. Before the war, Ukraine was one of the top grain exporters and its supplies are important to prevent famine and price increases around the world.
Why is Russia’s approval needed for Ukrainian exports?
Under the deal, Russian, Ukrainian, Turkish and UN inspectors will check that no weapons are entering Ukraine on board freighters collecting grain. Without Russian inspectors, the ships can no longer be dispatched in the coordination center in Istanbul.
Russia could also blockade the three Ukrainian ports as it did at the beginning of the war. Foreign freighters could theoretically approach the ports, which are under Ukrainian control, without Russia’s consent – but they ran the risk of being fired upon by the Russian side.
What are the effects of the end of the agreement in Germany?
The farmers’ association sees no bottlenecks on the German and European market for the time being. “Your own harvest is available here,” said Deputy Secretary General Udo Hemmerling of the German Press Agency.
In the event of a longer interruption, however, there could be renewed bottlenecks and price increases in global agricultural trade, particularly to the detriment of importers of bread grain in Arab countries, Africa and Asia. Hemmerling accused Russia of playing “political poker” at the expense of people in developing countries.
What does an end to the global agricultural prices initiative mean?
They are likely to rise, as they did last year, when the Russian blockade suddenly prevented Ukrainian grain exports from entering the world market. When the agreement was signed and Ukraine was able to export again, global food prices fell 23 percent below the record level of March 2022, according to the UN.
Federal Agriculture Minister Cem Özdemir pointed this out: “Let’s not forget: Ukraine’s agricultural exports not only feed the hungry around the world, they also calm the world markets and thus ensure affordable food – and bring Ukraine vital income.”
What does Ukraine’s grain shipments mean for poorer countries?
Many countries depend on wheat from Ukraine to feed their population. According to the World Health Organization (WHO), a good 10 million children are at risk of acute hunger in Djibouti, Ethiopia, Somalia, South Sudan, Sudan and Uganda.
The German ambassador to the UN organizations in Geneva, Katharina Stasch, called the export “a matter of life and death”. Many families already spend the majority of their income on food. When prices rise, they lack the money to survive.
How much has arrived there so far thanks to the initiative?
According to the UN, the poorest countries have received a total of 1.9 million tons of wheat and 26,000 tons of sunflower oil since the grain initiative began. Although the largest share of Ukraine’s total exports went to China, wheat, which is so important for African countries, plays practically no role.
How important is grain for the World Food Program (WFP)?
A failure of the agreement is a serious setback in the fight against the hunger crisis, said Sigrid Müller, deputy director of the WFP office in Berlin. WFP shipped hundreds of thousands of tons of Ukrainian wheat directly to hunger hotspots.
“The deal has been instrumental in bringing down food prices around the world,” she said. “It is now to be feared that the food price spiral will start all over again. More hunger and misery will be the result.”
What is Russia asking for an extension?
Russia wants Western sanctions to be eased. It sees its own grain and fertilizer exports hampered by this. The Western sanctions do not affect grain or fertilizers directly, but business is difficult because of sanctions in international payments and cargo insurance.
The UN has already pledged to try to find avenues for Russian exports. But that depends on western countries. The EU has proposed the establishment of a subsidiary of the Russian Agrarian Bank to handle financial transactions. Moscow rejected this as a deliberately unworkable solution. It would take months.