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Revival of Black Sea grain deal crucial for food access, price stability

August 3, 2023 at 7:41 pm

An aerial view of “Glory” named empty grain ship as Representatives of Russia, Ukraine, Turkiye and the United Nations (UN) of the Joint Coordination Center (JCC) conduct inspection on vessel in Istanbul, Turkiye on August 09, 2022. [Ali Atmaca – Anadolu Agency]

The revival of the Black Sea grain deal is significant for global food price stability and continued access to food in poor countries, Anadolu Agency reports.

Following Russian President Vladimir Putin’s announcement of withdrawal from the deal on 17 July, the matter resurfaced in a telephone conversation between Turkish President Recep Tayyip Erdogan and Putin.

Erdogan stressed that the suspension of the deal, which he termed the “bridge of peace,” would benefit no one and particularly harm countries with low income levels that rely on the grain.

Quoting figures, he said grain prices rose 15 per cent in the past two weeks, compared to a decline of 23 per cent when the deal was in place.

Turkiye will continue its intensive efforts and diplomacy for the continuation of the deal, the Turkish President reiterated.

READ: Time, place of meeting of Russia, Turkiye presidents to be set via diplomatic channels: Kremlin 

The deal brokered by the UN and Turkiye in 2022 successfully facilitated grain exports from three ports in Ukraine.

Uncertainty hovers over food prices

While uncertainties persist about the renewal of the deal despite negotiations, the current interruption poses a risk of instability in markets and negative impacts on humanitarian aid.

The UN Food and Agriculture Organisation (FAO) said that, while there is no immediate risk in food supply, the long-term interruption of the deal could impact access to food.

FAO emphasised that the focus of the deal should be on the “most fragile countries and groups” currently experiencing food insecurity and inadequate nutrition. Ukrainian farmers facing difficulties due to war as well as declines in production and income should also be considered within this scope.

The UN body predicted that the revival of the deal will prevent a sharp decline in agricultural production in Ukraine and that all alternative initiatives for grain exports from Ukraine would be more costly compared to the grain deal, with these costs affecting international food prices.

Amid climate shocks pressing agricultural food systems, the decrease in supplies from Ukraine in international markets is anticipated to pose a significant risk to global food security.

Described as a diplomatic success, the grain agreement facilitated the shipment of over 33 million tons of grain products to global markets.

Of this shipment, 39 per cent went to European countries, 24 per cent to China, and 15 per cent to the Middle East and North Africa.

Conditions apply on Russia’s return to deal

Kremlin spokesman, Dmitry Peskov, said on 17 July that Russia could immediately return to the agreement if the conditions concerning Russia in the Black Sea Grain Initiative were met.

Russia’s conditions include the reconnection of the Russian agricultural bank, Rosselkhozbank, to the SWIFT system, the resumption of the supply of agricultural machinery and spare parts to Russia and the lifting of restrictions on ship insurance and access bans to ports.

UN spokesman, Stephane Dujarric, stated that there are no means to remove all obstacles related to Russia’s demands for the deal.

Despite this, Russia continues its grain exports. It has achieved a harvest of approximately 160 million tons of grain in the 2022-2023 agricultural season, and has exported about 60 million tons of this amount.

Putin stated that, despite challenges posed by Western countries, Russia remains the world’s largest grain exporter and will also provide free grain to some African countries.

Russia’s withdrawal has also increased risks to the security of ports and civilian ships in the Black Sea.

The Russian Defence Ministry now classifies all ships travelling to Ukrainian ports in the Black Sea as “potential military cargo carriers”.  Ukraine has taken a similar decision for civilian ships travelling to Russian ports in the Black Sea.

Russian officials have accused Ukraine of using the Black Sea corridor for “terrorist attacks”, while Ukrainian officials claim that Russia has attacked Odessa ports, destroying numerous grain facilities and around 180,000 tons of grain in the past 10 days.

The Russian Defence Ministry also reported attacks by Ukrainian unmanned sea vehicles on civilian ships in the Black Sea. The escalation of military tensions in the region following the halt of the Black Sea Grain deal raises concerns about the future of global food markets.​​

READ: Putin says Russia will provide free grain to 6 African countries in next 3-4 months