Russia backtracked over the weekend from a U.N.-brokered deal to export Black Sea grains. The U-turn is likely to hit shipments to import-dependent countries, deepening a global food crisis and sparking gains in prices.
Hundreds of thousands of tonnes of wheat booked for delivery to Africa and the Middle East are at risk following Russia’s withdrawal, while Ukrainian corn exports to Europe will get knocked lower.
NATO has called on Russia to urgently renew the U.N.-brokered deal that enabled Ukraine to resume grain exports via the Black Sea amid a global food crisis.
“President Putin must stop weaponizing food and end his illegal war on Ukraine,” NATO spokesperson Oana Lungescu said.
“We call on Russia to reconsider its decision and renew the deal urgently, enabling food to reach those who need it most.”
When the agreement had originally come about, all NATO allies welcomed it. The exports helped to reduce food prices across the world.
Then on Saturday, Russia suspended its participation in the grain deal for an “indefinite term.” It claimed the reason was a major Ukrainian drone attack on its Black Sea fleet in Crimea.
Food supplies are once again in jeopardy, as the top half of the hemisphere heads into winter. Earlier this year, the global price of wheat jumped to an all-time high. Corn also skyrocketed to a 10-year high. This was due to Russia’s invasion of Ukraine.
Under the U.N.-brokered grains deal, a Joint Coordination Centre (JCC) made up of U.N., Turkish, Russian, and Ukrainian officials agree on the movement of ships and inspect the vessels. More than 9.5 million tonnes of corn, wheat, sunflower products, barley, rapeseed, and soy have been exported from the Black Sea since July.
Although global agricultural commodity prices have come off record highs in recent months, local retail food prices remain high and now face further upside.
Experts and analysts said it takes about two months for higher grain prices to filter through the supply chain and impact consumers at the retail level. But food processors do not have much forward coverage, so it is likely to be a lot quicker.
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