Black Sea Grain Initiative collapse sparks fears over global food supplies

18 Jul 2023 --- Russia has decided that no more food is to leave Ukrainian seaports. The pronouncement marks the end of the Black Sea Grain Initiative, which, according to the UN, has had a “vital” and “indispensable role” in global food security by easing market pressures and averting the worst impacts of the food crisis.

Putin has attributed the failure of the initiative to the disregard of Russia’s demands, such as respecting the Russian-UN memorandum on promoting food products and fertilizers, unfreezing the country’s bank payments and access to the SWIFT payment system.

Additionally, the country has requested restoration of its financial activities relating to agriculture and a normalizing of the supply of ammonia through the Togliatti-Odessa pipeline.

Zelensky has accused Russia of “weaponizing hunger” and “destabilizing the global food market,” US Secretary of State Antony Blinken and the European Council, representing all heads of state or government of the EU, have also accused the country of “weaponizing food.”

Antonio Guterres, UN secretary-general, has called the Russian authorities’ decision “a blow to people in need everywhere.”

“Ultimately, participation in these agreements is a choice. But struggling people everywhere and developing countries don’t have a choice,” he highlights.

Russia has decided that no more food is to leave Ukrainian seaports. The pronouncement marks the end of the Black Sea Grain Initiative.Back to land routes
Through the sea corridor, over 32 million metric tons of food commodities from Ukraine have been exported to 45 countries across three continents in the year since the initiative’s inception.

Without access to sea trade routes, Ukrainian foodstuffs will have to go through less efficient land routes, such as the EU solidarity train routes.

“The EU will spare no efforts to continue to support the timely and stable delivery of all goods, especially agricultural products to global markets through EU-Ukraine solidarity lanes,” says the European Council.

Nonetheless, land routes can cause trouble, as an excess of foodstuffs end up in a few number of countries, destroying some farmers livelihoods.

The EU had to unlock a second package of €100 million (US$112.36 million) to support farmers from Bulgaria, Hungary, Poland, Romania and Slovakia. The bloc has also had to limit the imports of some foods to these countries to ease logistical bottlenecks.

EU action came after Hungary, Poland and Slovakia temporarily banned Ukrainian grain imports to protect domestic farmers in what EU authorities called an “unacceptable unilateral action.”

Vulnerable nations left to starve?
Although Putin said last week that only 3% of Ukrainian exports were going to poorer countries, the real benefits of the Black Sea Grain Initiative was that it kept global food prices down, as international markets are intertwined.

The importance might be in the grain initiative working and not on who is benefitting, Monika Tothova, UN economist for the Food and Agriculture Organization (FAO), told Nutrition Insight.

“Although some goods are going to food insecure nations directly, in an open international trade environment, the actual destination is not relevant. It is important that the goods are flowing and departing Ukraine and, as such, are putting downward pressure on global prices, benefiting all consumers.”Ukraine, the US and the European Council have accused Russia of weaponizing food and hunger.

“The shipment of these commodities contributes to stabilizing world markets,” she highlights.

In the same vein, Ismini Palla, UN spokesperson for the Black Sea Grain Initiative, told us that “the global humanitarian benefits of the Initiative are evident and are not limited to exports to specific low-income countries.”

Global food commodity prices are 23.4% below the peak reached in March 2022, according to the UN Food and Agriculture Organization.

Moreover, in 2022 the World Food Program (WFP) bought 8% of the total wheat exported under the Black Sea Grain Initiative. The end of the agreement could deal a severe blow to the already overstretched capabilities of the WFP.

“It is deeply concerning to see hunger used as a tool in geopolitical conflicts, at a time when ensuring access to nutritious food should be a global priority,” Jean-Michel Grand, executive director of Action Against Hunger UK, tells Food Ingredients First.

“The present global hunger crisis is a result of several factors: climate change, unstable markets, gender inequality and poverty, to name but a few – and the ending of the Black Sea grain initiative threatens to compound this crisis by driving up the price of food and fertilizer.”

Deal was on life support
While the Black Sea Grain Initiative expired at midnight yesterday, the number of transit ships had declined steeply in the last few months.

In May, food exports amounted to 1.3 million metric tons, compared to a peak of 4.2 million metric tons in October 2022.

Russia had been delaying inspections. Slow inspections have been a recurring issue. At one point last October, over 160 vessels were stuck in a queue near the inspection point in the Bosphorus Strait in Turkey.

By Marc Cervera

This feature is provided by Nutrition Insight’s sister website, Food Ingredients First.

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