Black Sea Grain Initiative expires Thursday, lack of agreement threatens global food security

16 May 2023 --- Authorities could run out the clock and let the Black Sea Grain Initiative end this Thursday, as Olga Trofimtseva, Ukraine’s foreign ministry ambassador-at-large, said yesterday there are no talks scheduled this week between Ukraine, Russia and the mediating UN and Turkey.

Martin Griffiths, the UN under-secretary-general for humanitarian affairs and emergency relief coordinator, said the continuation of the initiative is “critically important” and that the UN will continue to call parties to meet in the coming days.

The Black Sea Grain Initiative topped 30 million metric tons of exported food from Ukraine last week. The flow of cereals and other foodstuffs has helped bring down food commodity prices, which are 19.7% lower than a year ago, according to the UN Food and Agriculture Organization. Moreover, wheat prices are at their lowest level since July 2021.

Last March, the deal was renewed on the day it was due to expire. At that time, all parties sat down at the table to negotiate until the last minute. Nonetheless, Stephen Dujarric, UN secretary general spokesperson, remains optimistic.

“We expect discussions to continue before May 18,” he said yesterday.

Why the deal might fail
Russia has repeatedly called for the normalization of its agricultural exports, including bank payments, transport logistics, insurance, the unfreezing of financial activities and the supply of ammonia through the Togliatti-Odessa pipeline.

“The export of ammonia was supposed to be resumed in parallel with the grain exports, but that did not happen,” says Vasily Nebenzya, Russian representative to the UN.

“We can’t stress enough how important the Black Sea Initiative is, along with the efforts to increase the flow of Russian food and fertilizer to markets,” notes Dujarric.

The Black Sea Grain Initiative topped 30 million metric tons of exported food from Ukraine last week.Some countries, like the US, are saying that Russia is not acting in good faith.

“While Russia keeps Ukrainian grain supplies from feeding the hungry, Russia is successfully exporting its own bumper crop of grain,” says Robert Wood, deputy US ambassador to the UN.

“Every day Russia obstructs and threatens to suspend the Black Sea Grain Initiative, Russia raises global food prices around the world,” he highlights.

“Russia must stop holding global food security hostage to its cynical power plays and profit-taking,” he continues.

While Ukraine has to fight for every metric ton of grain it wants to export, Russia is set to double its grain exports during the first half of the year.

“It is disgusting that Russia still pretends to be on the losing side of the deal,” adds Segiy Kryslytsya, Ukraine’s ambassador to the UN.

The good
Ismini Palla, UN spokesperson for the Black Sea Grain Initiative, told us that the “humanitarian benefits of the Initiative are evident.”

Global commodity prices are down to late 2021 levels, according to FAO. Of the shipped food, 50.4% was corn, 27.6% wheat, 10.6% sunflower oil and meal and the rest was other foods such as soya beans, rapeseed and peas.

Russian authorities say the Initiative prioritizes food for rich countries. Nebenzya notes that 40% of the exported food has gone to EU countries and only “3% to the poorest countries in the world.”

Monika Tothova, UN economist for FAO, told us: “Although some goods are going to food insecure nations directly, in an open international trade environment, the actual destination is irrelevant.”

“It is important that the goods are flowing and departing Ukraine and, as such, are putting downward pressure on global prices, benefiting all consumers,” she highlighted.

The bad
The flow of goods through the Black Sea routes has not been without trouble.

Ukraine has condemned Russia multiple times, accusing the country of delaying ship inspections and using food as a tool of war. At one point, 165 vessels were stuck in a queue near the geographic chokepoint of the Bosphorus Strait in Turkey, where inspections are being carried out.The WFP is running out of money in many countries, with the country suspending food aid to 200,000 Palestinians.(Image Credit: WFP/Mostsfa Ghroz).

While the flow of goods has been uneven, sea routes are the only way to transport millions of metric tons of foodstuffs.

The alternative land routes have led to food ending in the EU countries bordering Ukraine, destabilizing Eastern European markets and moving Polish and Hungarian authorities to implement a swift ban on grain imports and oil crop seeds from the country.

The European Commission, earlier this month, approved “exceptional and temporary preventative measures” to allow some nations to limit the import of foodstuffs coming from Ukraine and ease logistical bottlenecks.

The ugly
The end of the Black Sea Grain Initiative will come at the same time as the World Food Program (WFP) food budget is stressed.

The WFP has drawn over 600,000 metric tons of food from the Ukraine Grain Initiative. Moreover, the deal would end just when food was starting to sail more toward African nations, as food going toward Africa has increased over 50% during the last iteration of the agreement extension signed March 18.

Earlier this month, the WFP suspended food aid to 200,000 Palestinian due to a “severe” fund shortage. The organization also cut aid in Afghanistan last month.

Potential disruption to cereal prices would come at a time when food insecurity has increased from 135 million to 345 million, according to the WFP.

Cindy McCain, executive director of the WFP, has said it will be impossible to feed the region unless a deal is made.

By Marc Cervera

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