UN-led grain initiative “must be renewed” to keep prices stable and secure food supplies

21 Oct 2022 --- A new report from the UN trade and development body UNCTAD has provided hope for millions impacted by the rising prices and reduced supplies of staple foodstuffs such as wheat and maize from war-torn Ukraine. However, with the initiative ending in November and its renewal uncertain, the prices of some commodities, such as wheat and maize, are rising again, the report warns.

The UN-led Black Sea Grain Initiative has helped to stabilize and subsequently lower global food prices and move precious grain from one of the world’s breadbaskets to the tables of those in need.

With the deadline looming, it also underlines why it’s critical to renew the initiative in November, says UNCTAD.

Historical highs persist
Wheat and maize prices are at historically high levels. This weighs on the affordability of basic foods and poses a risk to food security globally.

This is one more reason why the renewal of the UN-led initiative is important for developing countries.

The report was produced with contributions from the Joint Coordination Centre for the Black Sea Grain Initiative, comprised of senior representatives from Ukraine, the Russian Federation, Turkey and the UN, which ensures the safe maritime transportation of grain and other foodstuffs from the three key Ukrainian ports in the Black Sea to the rest of the world.

Following the agreed initiative in July by Ukraine, Russia and Turkey, and led by UN chief António Guterres, port activity in Ukraine is picking up, and large shipments of grain are reaching world markets. The deal also involves increasing the flow of crucial fertilizers from Russia.

In Istanbul, UN secretary-general António Guterres observed the WFP ship SSI Invincible 2 headed to Ukraine to pick up the largest cargo of grain yet exported under the Black Sea Grain Initiative.

Reaching tables of the needy
As of October 19, the total tonnage of grain and other foodstuffs exported through the initiative had reached almost 8 million metric tons.

“The UN-led initiative has helped to stabilize and subsequently lower global food prices and move precious grain from one of the world’s breadbaskets to the tables of those in need,” the report says.

The Food Price Index published by the UN Food and Agriculture Organization (FAO) shows prices of global food staples have declined in recent months – by about 8.6% in July, nearly 2% in August and 1.1% in September.

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Paramount to providing food security
Without the initiative, UNCTAD believes there would be “little hope” for providing food security, especially in developing and least-developed countries (LDCs).

With the Russian invasion, valuable grain corridors were closed off. Weekly ship departures from Ukrainian ports plummeted.

The initiative reopened the grain gates of Ukraine to the world, and particularly to developing countries.

Maize and wheat account for more than 70% of the nearly eight million tons of grain that have left Ukrainian ports so far.

Nearly 20% of the wheat exports have gone to LDCs with vulnerable populations.

The initiative doubled the wheat shipped to LDCs between August and September – about half a million metric tons.

Pushing down prices
The initiative has helped to make grain more available and eased pressure on food prices. The report indicates that this has helped improve global access to food, particularly for the poorest and most vulnerable.

The prospect of the initiative and the reopening of the Black Sea ports helped to push down historically high market prices.

But prices are rising again: “In a context where trade is very uncertain, signals matter very much,” UNCTAD secretary-general Rebeca Grynspan says. “When there is no clarity, no one knows what will happen, and speculation and hoarding take over.”

Edited by Elizabeth Green

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