Did the Russia-Ukraine Grain Deal Work?
For five months after Russia’s invasion last year, Ukraine – a leading producer of grain and other agricultural products – could not export these products to the world. The Russian blockade of Ukraine’s ports meant the blockage of a vital artery in the global food system.
That was potentially catastrophic for the world’s poorest nations due to grain shortages and consequent rise in prices, food security experts have warned. Russia and Ukraine finally reached an agreement in July, brokered by Turkey and the UN, to end the blockade. The ‘Black Sea Grains Initiative’ did not go entirely smoothly, but was largely maintained despite Russian threats of withdrawal.
That deal is set to expire on March 18. Negotiations to renew it are ongoing, with Russia saying earlier this week that it was willing to extend the deal by 60 days – half of the 120 days agreed upon when the deal was renewed last November.
Moscow says it is unwilling to go further because of restrictions on its own agricultural exports. While Russia’s food exports have not been directly sanctioned, Russian officials say secondary sanctions on logistics and insurance have made it difficult for the country to export. Moscow has been signaling discontent on this point for months.
What is the problem?
William Moseley, a professor of geography at Macalester College and a member of the UN High-Level Panel of Experts on Food Security and Nutrition, says it is true that Russia has struggled to export fertilizers under the deal. But the country’s wheat exports have doubled, he points out, suggesting they are doing “very well”.
This highlights the complexity surrounding the review of the Black Sea Grains Initiative eight months after its first agreement.
The grain deal “contributed to lowering the global cost of food and offered critical relief to people,” UN Secretary-General Antonio Guterres said earlier this month, while in February the head of the World Food Program (WFP) , David Beasley, said its renewal was “critical”.
Bernard Lehmann, a veteran food security expert and chair of the UN High-Level Panel of Experts on Food Security and Nutrition, told DW that the grain deal had a significant impact on alleviating famine in parts of North and East Africa. , as well as in the Middle East and Asia.
“Without the deal, there would have been a grain shortage for these imports, and prices in general would have risen even further, making buying wheat from other countries very, very expensive,” he said. “Thus, the deal generally calmed the market and the countries mentioned above benefited from it.”
Moseley describes the deal as a “qualified success” as it contributed to an 8% drop in international grain prices since March and allowed Ukraine to open up storage capacity and continue producing. “The deal can be considered successful especially if the objective is to calm fears and stabilize grain prices,” he said.
He points out that grain prices have yet to return to pre-war levels and says the deal has highlighted how vulnerable certain African countries are to grain import supply disruptions and price volatility. He says countries that produced their own grains, including traditional small grains such as millet and sorghum, fared much better during the recent crisis.
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.