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

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

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

Ukraine said a dozen ships had set sail on Monday after initially reporting that more than 200 vessels, many of them loaded and ready to travel, were stuck after Russia announcement for the weekend. Later in the day, Russia’s defense ministry said shipping traffic had been suspended, calling the move “unacceptable” after Moscow blamed a Ukrainian drone attack on its Black Sea fleet.

Such export is key: Ukraine and Russia are key world suppliers of wheat, barley, sunflower oil and other food to countries in Africa, the Middle East and parts of Asia where many are already struggling with hunger.

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

WHAT DID THE AGREEMENT ACHIEVE?

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

Agreement on grain has lowered global food prices about 15% from their peak in March, according to the UN, and the UN secretary general has called on Russia and Ukraine to renew the agreement when it expires on November 19.

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

Before grain was agreed upon, the US and Europe accused Russia of starving vulnerable parts of the world by denying exports. Since the agreement, Russian President Vladimir Putin claims the majority exported grain went to Europe instead of the world’s hungriest nations.

UN aid chief Martin Griffiths said 23% of all cargo exported from Ukraine under the grain deal went to low- and lower-middle-income countries, and 49% of all wheat shipments went to those countries.

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

WHAT ABOUT SHIPS THAT RECENTLY LEFT UKRAINE?

A ship carrying 30,000 tons of wheat for Ethiopia under the program set sail on Monday, Ukraine said, one of a dozen ships carrying more than 354,000 tons of agricultural products that Ukraine said left port after the UN and Turkey agreed on the traffic of ships through the humanitarian corridor. Ethiopia, along with neighboring Somalia and Kenya, has been hit hard the biggest drought in the region in the last few decades.

Russia’s ambassador to the UN Vasiliy Nebenzia said at the emergency meeting of the UN Security Council called by Moscow on Monday that “the Black Sea remains an area of ​​hostilities” and “we cannot allow the unhindered passage of ships without our inspection”.

Nebenzia said that Russia opposes the decision of the UN, Ukraine and Turkey to allow the passage of ships without Russian inspection. Moscow will soon unveil measures to control what is allowed “without our consent,” he added.

William Osnato, senior analyst for agricultural data and analytics at Gro Intelligence, said ship tracking charts do not show any vessels heading to Odessa.

WHAT IS HAPPENING NOW?

Russia has offered to deliver up to 500,000 tons of grain “for free to the poorest countries over the next four months.” The Russian Ministry of Defense emphasized that Russia is not withdrawing but suspending the grain agreement.

Although sanctions against Russia do not affect its grain exports, and a parallel war agreement was supposed to clear the way for Moscow’s supply of food and fertilizers, some businesses were cautious.

Developing countries will have to find new grain suppliers and pay more from countries such as the US, Argentina and Australia, where dry conditions or rain pose problems, said Glauber, the former chief economist at the US Department of Agriculture. But high prices mean producers will plant more, and those that are not typically big wheat exporters, such as Brazil and India, have increased shipments.

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

WHAT ELSE AFFECTS THE FOOD SUPPLY?

Peter Meyer, head of grains and oilseeds analytics at S&P Global Platts, said he doubts Russia’s decision will have a lasting impact on the price and supply of corn and grains. Commodity traders were skeptical the deal would last, he said, one reason corn prices have risen, not fallen, since the deal was reached in July.

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

But in parts of the African continent, where prices remained highconcern is rising again.

“This is going to send another little shock wave through the markets and I think it’s going to push prices up for a while,” said Shaun Ferris, agriculture and markets adviser for Catholic Relief Services in Kenya, a distribution partner of the World Food Programme. “This will mean that prices in East Africa, at record highs, will not come down anytime soon.”

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

The latest drop in Ukrainian exports is another layer of stress, he said.

In poorer countries in North Africa and the Middle East where bread is a critical part of people’s diets, alternative foods such as rice in Asia or sorghum elsewhere in Africa may not exist, Glauber said. It raises the specter of unrest in places where bread prices fueled the Arab Spring uprisings.

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

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

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

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Follow all AP reports on the food crisis at https://apnews.com/hub/food-crisis and the war in Ukraine in https://apnews.com/hub/russia-ukraine.



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