M A Hossain,
Russia has suspended a critically important wartime deal aimed at transporting grains from Ukraine to various parts of the world across the Black Sea. The Kremlin has accused the West of its withdrawal from the deal due to unmet preconditions and demands. This development has reignited fears about global food security and dealt a blow to the global market. The agreement, brokered by Turkey and the United Nations(UN) in July of last year, represented a rare diplomatic breakthrough designed to avert a global food crisis when the global economy was already grappling with high inflation and the lingering effects of the Coronavirus pandemic. Now, Russia's withdrawal from this Accord disrupts the flow of food from Ukraine and also poses a risk to shipping safety in the North Western Black Sea. Undoubtedly, food is being weaponized in this geopolitical conflict.
Following Russia's all-out invasion of Ukraine and the blocking of its seaports in February 2022, Ukrainian grain exports through the Black Sea came to a halt. The agreement, known as the Black Sea Grain Initiative, was brokered by the UN and Turkey to alleviate a global food crisis. Under this agreement, Russia reopened three of Ukraine’s Back Seaports, ensuring the safety of grain shipping only. It also facilitated the movement of Russian produce despite Western sanctions. A joint coordination center comprising representatives from Russia, Ukraine, Turkey, and the UN was established to inspect ships ensuring they carry only food and monitor their movements. The deal covered three Ukrainian ports on the Black Sea coast-Odesa, Chernomorsk, and Pivdennyi (previously known as Yuzhny). Initially, the deal was set for 120 days and has since been renewed three times.
According to the Food and Agriculture Organization, global food prices, which skyrocketed soon after the Russian invasion, began to ease in the months following the agreement. Both countries are major suppliers of wheat, barley, sunflower oil, and other affordable food products on which Africa, the Middle East, and parts of Asia rely. Ukraine is also a significant exporter of corn and Russian fertilizer. Once the grain deal was established, the World Food Program got a supply of 725,000 metric tons of humanitarian food aid from Ukraine, benefiting countries on the brink of famine, including Ethiopia, Afghanistan, Somalia, and Yemen. The grain deal allowed Ukraine to export nearly 33 million commodities. However, the Kremlin's recent move now jeopardized a vital route for Ukrainian grain to reach global markets. According to the International Rescue Committee report, the grain deal served as a lifeline for the 79 countries and 349 million people facing food insecurity.
Moscow has been dissatisfied with the deal since its Inception, claiming that it failed to deliver on its promise to free up Russian agricultural exports that have been blocked by Western sanctions. Although food and fertilizer are not directly subject to sections, but restrictions on banking, transit, and insurance indirectly made trade unviable. To renew the grain deal, Russia demanded the reconnection of the state-owned Russian Agricultural Bank to the international SWIFT messaging service that is critical for cross-border payment. Additionally, Russia insisted on lifting restrictions on maritime insurance and on the supply of spare parts used in agricultural machinery, ending sanctions against fertilizer companies and individuals linked to them, and restoring an ammonia pipeline that crosses Ukraine. Turkish President Recep Tayyip Erdogan played a pivotal role in the agreement, but the ties between these two countries have come under strain following Ankara's recent pro-Western moves.
Ukraine’s economy heavily relies on agriculture, and 75% of its grain exports pass through the Black Sea corridor. It can also export a smaller amount of grain by land or through the Danube River to neighboring Romania's Black Sea port. However, these routes have limited capacity compared to sea shipments. Now, with the demise of the deal, Ukraine will be forced to export most of its grains and oil seeds through its land border and Danube ports. This will pile tremendous pressure on Ukrainian farmers' profits and could prompt them to plant less in the coming season. Consequently, Africa and the Middle East are likely to become more dependent on Russian food grains, especially wheat. Russia is now the top wheat supplier, exported a record 45.5 million metric tons in the 2022-23 trade year, and is expected all-time high of 47.5 million metric tons in the 2023–24 trade year.
Aid groups and the West called on Russia to reverse the move. UN chief António Guterres stated that the decision would strike a blow to the people in need everywhere. As per the International Rescue Committee, approximately 80% of East Africa's grain is imported from Russia and Ukraine. Therefore, the disruption of the food supply could have devastating consequences. After Russia exited the deal, wheat prices in Chicago trading rose about 3% on the day. The prices of wheat, corn, and soybean in the markets surged, potentially triggering a fresh bout of destabilizing global food inflation shortly. According to the UN report, the Black Sea Initiative helped ease a global food crisis, reducing food prices by over 23% since March 2022. It also reported that before the deal, the Ukraine crisis made 783 million people to face chronic hunger in 2022.
The weaponizations of food in the geo-political conflict, exemplified by the Russia-Ukraine grain deal suspension, threatens global food security. This move has the potential to disrupt Ukraine's economy and impact a region reliant on Ukrainian exports. The West would also face food inflation and potential market destabilization. It is evident that Russia's actions reflect a Cold War mentality. The West also must restrain the monopoly of their dollar system and foster cooperation to mitigate conflict-driven consequences on global food security.
M A Hossain is a political and defense analyst based in Bangladesh.
Email : writetomahossain@gmail.com
This article published at :
1. The Asian Age, BD:24July23
2. The New Nation, BD :24July23
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