Russia is pulling out of a year-old agreement that allowed Ukraine to export its grain to global markets, raising fears of rising prices and food shortages in developing nations.
Russia and Ukraine are among the world’s top producers of grains and oilseeds. Under the Black Sea Grain Initiative, brokered by the United Nations and Turkey, Russia eased its naval blockade of Ukrainian ports and allowed Ukrainian ships to carry grain across the Black Sea.
The U.N. says Ukraine has shipped 32.9 million metric tons of grain under the agreement.
Russia invaded Ukraine on Feb. 24, 2022, sending global food costs soaring. The grain agreement, signed five months after the invasion, helped bring down prices and ease shortages.
The agreement expired Monday, and while Russia’s announcement came soon after an attack on the Kerch Strait Bridge in Crimea, the Kremlin said the two were not connected.
OZAN KOSE, AFP via Getty Images
The Kremlin has criticized the pact as unfair to exports of Russian food products.
However, Russia exported 45.5 million metric tons of wheat in the 2022-2023 trade year, an all-time high, the Associated Press reported. Another record 47.5 million metric tons is estimated for 2023-2024, according to the U.S. Department of Agriculture.
Russia has not been satisfied with the agreement and has said Ukraine was allowed to send exports to world markets while Western sanctions limited Russian sales of grain.
Russia also said Ukrainian grain did not go to the countries that needed it most and accused Ukraine of using the pact for military purposes.
Russia announced on Oct. 29 that it was suspending the deal after a drone attack on Sevastopol in Crimea. It reversed the decision on Nov. 2 after Turkey intervened and Ukraine promised not to attack Russian ships in the Black Sea shipping route.
Wheat exports provide a good snapshot of Ukrainian and Russian positions in the world food chain:
Nations in North Africa and the Middle East depend heavily on Russia and Ukraine for wheat. Those countries have also been hit by droughts and higher food prices and could experience political instability.
While nearly every nation could be affected by higher prices and shortages, it’s the non-affluent ones that will feel them most. Nations that have driven recent increases in wheat demand could also be affected.
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CONTRIBUTING Jim Sergent and Veronica Bravo, USA TODAY
SOURCE USA TODAY Network reporting and research; oec.world; Associated Press; Department of Agriculture; Federal Reserve Bank of St. Louis; Cornell University
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