Renewal of Ukraine-Russia Grain Deal Crucial for Global Food Security Amid Increasing Risks

The United Nations and Turkey have brokered agreements with Ukraine and Russia to facilitate the transportation of food and fertilizer from the warring nations to regions suffering from food shortages. These agreements have alleviated concerns over global food security, but they are now facing increasing risks.

Moscow has raised concerns by stating that it may not renew the expiring deal unless its demands are met, including ensuring smooth agricultural shipments. The Black Sea Grain Initiative, established in August 2022, has enabled the export of 32.8 million metric tons (36.2 million tons) of food from Ukraine, with over half going to developing countries that receive assistance from the World Food Program.

If the deal is not renewed, there could be a significant spike in food prices, according to Maximo Torero, the chief economist at the U.N. Food and Agriculture Organization. However, some analysts believe that there will not be a lasting increase in the cost of global food commodities like wheat due to sufficient grain supplies worldwide. Nevertheless, many countries are already grappling with high local food prices, exacerbating the problem of hunger.

The grain deal between Ukraine and Russia involved reopening Ukrainian Black Sea ports that were previously blocked and facilitating the movement of Russian produce amid Western sanctions. Both countries are major suppliers of wheat, barley, sunflower oil, corn, and fertilizer, which are crucial for food production in Africa, the Middle East, and parts of Asia. The interruption of shipments from Ukraine significantly impacted global food prices and exacerbated the global food crisis.

The deal ensures the safe passage of ships entering and leaving Ukrainian ports, with inspections conducted by Russian, Ukrainian, U.N., and Turkish officials to verify that they are carrying only food and not weapons.

The deal has achieved notable results, including reducing global food commodity prices and allowing the World Food Program to resume its humanitarian food aid operations. It enabled the delivery of 725,000 metric tons (800,000 tons) of food aid to countries like Ethiopia, Afghanistan, and Yemen.

However, the deal is now under threat due to Russia's demands for the removal of sanctions and restrictions on agricultural exports. Russian President Vladimir Putin has expressed his unwillingness to extend the deal unless these demands are met. While Western allies have assured that food and fertilizer are exempt from sanctions, companies remain cautious about doing business with Russia.

The potential discontinuation of the grain deal would have significant implications for the 79 countries and 349 million people facing food insecurity. Import-dependent countries like Lebanon and Egypt would need to find alternative suppliers, increasing costs due to longer transportation distances. Moreover, countries experiencing currency depreciation and rising debt levels would face additional financial burdens in securing food shipments.

Ukraine, whose economy heavily relies on agriculture, would not be completely cut off from global markets if the grain deal ends. It could utilize land and river routes through Europe, although these options have lower shipping capacities compared to sea routes. Nonetheless, the Ukrainian Grain Association aims to increase exports through the Danube River to neighboring Romania's Black Sea ports.

Apart from the potential disruption of the grain deal, other factors affecting food supply include the ongoing COVID-19 pandemic, economic crises, drought, and climate-related issues. Numerous countries, including Haiti, Ukraine, Venezuela, and several in Africa and Asia, are experiencing hunger driven by high domestic food prices. While drought can impact major grain suppliers, other countries such as Russia, Europe, Argentina, and Brazil are increasing their grain exports to compensate for any losses.

Overall, the renewal of the grain deal between Ukraine and Russia is crucial to maintaining global food security and ensuring affordable food access for vulnerable populations.