Russia on Saturday announced that it was suspending participation in the Black Sea Grain Deal, which was initiated in July to avert high inflation and famine in several regions of the world that may arise due to the ongoing war in Ukraine.
With Russia pulling out of the deal, it would become difficult for the grain shipments to leave Ukraine. This would mean a danger to the world’s food security because Ukraine is among the world’s largest wheat exporters, with a lot of it going to Africa.
According to the United Nations Conference on Trade and Development (UNCTAD), since the war started in February, around 4 per cent of all the wheat exported from Ukraine has been received by India. Egypt is the biggest recipient, with around 8 per cent.
What is the Black Sea grain deal?
Ukraine supplies around 45 million tonnes of grain to the world every year. But following Russia’s attack on the country in February, the country was left with “mountains of grains built up in silos, with ships unable to secure safe passage to and from Ukrainian ports, and land routes unable to compensate”, as told by UNCTAD.
Amid falling supply, the prices of grains started to rise. Eventually, with the high inflation in fuel prices, several countries, especially in Africa, found themselves on the brink of famine.
Under the deal, exports of grain, food, and fertilizer, including ammonia, were allowed to resume through a “safe maritime humanitarian corridor” from three key Ukrainian ports, viz Chornomorsk, Odesa, and Yuzhny/Pivdennyi to the rest of the world.
A Joint Coordination Centre (JCC) was established with representatives from all the signing parties to implement the deal. The first ship under the deal left Ukraine on August 1.
Amir Mahmoud Abdulla of Sudan was appointed as the United Nations Coordinator for the Black Sea Grain Initiative on August 12.
“By mid-September the JCC reported that some three million tonnes had left Ukraine, signalling positive progress. It is hoped that, eventually, up to five million tonnes will be exported monthly,” a UNCTAD report said.
As of September, 51 per cent of the total cargo was corn, 25 per cent wheat, 11 per cent sunflower products, six per cent rapeseed, and five per cent barley. The rest was made up of soya beans and other food items.
Around 25 per cent of the total shipment had gone to lower-income countries, with Egypt receiving the maximum of 8 per cent, followed by India and Iran. Another 25 per cent went to upper-middle-income countries like Turkey.
The major chunk, around 50 per cent, of the total shipments went to high-income countries like Spain, Netherlands, Korea, Germany, Ireland and Israel.
“As increased volumes of Ukraine’s agricultural production are now heading to market by sea, confidence has grown in the food and shipping industries, driving down prices and reducing risk,” Abdulla said on August 27.
“These million tons are just a beginning, the world cannot afford to have food and fertilizer held up by anything. Every shipment cleared through this route helps to calm markets, boost food supplies and keep farmers producing.”
What is the status of the deal now?
Russia pulled out from the deal on Saturday.
However, according to a report by Financial Times (FT), 12 ships carrying grain reportedly left Ukraine from its ports in the Black Sea on Monday despite the development.
The UN and Turkey approved the resumption of shipments.
According to Oleksander Kubrakov, Ukraine’s infrastructure minister, four more shipments were “headed towards Ukraine’s coast for loading”.