Russia has blocked the Ukraine grain deal. What happens now?
The grain agreement between Ukraine and Russia was meant to secure the global export of Ukrainian grain. Now that it has been terminated, what does it mean for the world?
Once labeled by UN Secretary-General Antonio Guterres as a "beacon of hope," the grain agreement between Ukraine and Russia has collapsed. For months, the agreement — also known as the Black Sea Grain Initiative — has been repeatedly extended but now Russia has terminated the deal just before it was set to expire. This can have global consequences.
Why is the agreement important?
Ukraine is one of the world's largest grain suppliers. Ukrainian grain feeds 400 million people worldwide, according to World Food Program figures. When Russia's full-scale invasion of Ukraine began in February 2022, many countries feared a famine. In Africa and the Middle East in particular, the threat of a hunger crisis loomed.
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Food prices had already risen before the start of the Ukraine war, but the Russian invasion made them skyrocket worldwide. In addition, the Russian blockade of the Black Sea meant millions of tons of grain were stuck in Ukrainian silos, in danger of rotting. According to the European Union "maintaining Ukrainian grain supplies remains critical to global food security."
What happens now?
As Russia has terminated the deal, it's unclear whether Ukraine will continue to ship the same quantities of grain to the world. The high cost of insuring the ships could be a major problem. Ships that want to cross the Black Sea already have to be insured for thousands of dollars. Shipping companies might be reluctant to send their ships through the war zone if there is no Russian approval.
Transporting grain overland could also become difficult. Since the beginning of the war, Ukraine has exported large quantities of grain via eastern EU countries — but there are too few freight carriages to export all of Ukraine's grain over land.
In addition, farmers in some eastern EU countries resent Ukrainian supplies being shipped through their countries, saying it undercuts local supplies and effectively takes away markets for their own crops.
In reaction, the European Union imposed import restrictions earlier this month that stipulate grain can be transported through Bulgaria, Hungary, Poland, Romania and Slovakia but cannot be sold in these countries.
How did the deal work?
The agreement regulated grain exports from the Ukrainian-controlled Black Sea ports of Odesa, Chornomorsk and Pivdenny. Ships crossed the Black Sea along an agreed humanitarian sea corridor toward Istanbul. Ships en route to and from Ukrainian ports were checked at a Turkish-controlled base by a special team of Russian, Turkish, Ukrainian and UN inspectors.
Two UN task forces ensured that Ukrainian grain could be shipped across the Black Sea, and they also facilitated the export of Russian food and fertiliser products.
How successful was the agreement?
The Black Sea Grain Initiative and EU solidarity corridors to support Ukrainian exports have helped food prices fall and stabilise. More than 30 million tons of grain and other food products have been exported up to May 2023 thanks to the agreement.
Poorer countries, in particular, have benefited: around 64% of wheat went to developing countries, while corn was exported almost equally to developed and developing countries. In March, though, several media outlets reported that less and less grain was being shipped from Ukraine.
Overall food exports made possible by the agreement fell by about three-quarters in May compared with October last year, as more shipping companies shied away from sending ships on the dangerous route. But strict regulations also make it difficult for ships to pass through quickly.
"The UN secretary-general is disappointed by the slowing pace of inspections and the exclusion of the port of Yuzhny/Pivdennyi from the Black Sea Initiative," Guterres' deputy spokesperson, Farhan Haq, said in a statement on Tuesday.
The Russian side has been complaining that its demands are not being met and that Western sanctions are hindering the export of its own agricultural products. President Vladimir Putin argued to an African peace delegation earlier this week that the grain agreement did not solve the problems African countries had with high global food prices, because only 3% of Ukraine's grain exports go to the poorest countries.
How important is the Black Sea?
The Black Sea is a strategic crossroads between southeastern Europe and Asia, a region where maritime, continental, geostrategic and economic interests come together.
It is the only opportunity for Ukraine to export its grain to the world by sea. Access to the open sea, and thus an opportunity to access other export routes, is only possible via the Dardanelles and the Bosporus — both straits controlled by Turkey.
Countries that border the Black Sea have an interest in the routes but the inland sea also plays a large economic role for China. As part of Beijing's New Silk Road project, the sea route across the Black Sea is supposed to allow for a better Chinese-European flow of goods.
Silja Thoms is a DW journalist
Disclaimer: This article first appeared on Deutsche Welle and is published by a special syndication arrangement.
