Why does the Black Sea grain deal's expiry matter? | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Wednesday
June 11, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
WEDNESDAY, JUNE 11, 2025
Why does the Black Sea grain deal's expiry matter?

Global Economy

Reuters
18 July, 2023, 08:40 am
Last modified: 18 July, 2023, 08:42 am

Related News

  • Russia says it is ready to remove excess nuclear materials from Iran
  • Russia drones hit Kharkiv and other parts of Ukraine, killing 2
  • Russia fines Apple for violating 'LGBT propaganda' law, TASS reports
  • Russia's latest drone strikes hit Kyiv, maternity ward in Odesa, says Ukraine
  • Russia responds to Trump-Musk feud with jokes, jibes and job offers

Why does the Black Sea grain deal's expiry matter?

Reuters
18 July, 2023, 08:40 am
Last modified: 18 July, 2023, 08:42 am
The Sierra Leone-flagged cargo ship Razoni, carrying Ukrainian grain, is seen in the Black Sea off Kilyos, near Istanbul, Turkey August 2, 2022. REUTERS/Yoruk Isik
The Sierra Leone-flagged cargo ship Razoni, carrying Ukrainian grain, is seen in the Black Sea off Kilyos, near Istanbul, Turkey August 2, 2022. REUTERS/Yoruk Isik

A deal allowing Ukraine to export grain via the Black Sea will expire at the end of Monday after Russia said it will suspend its participation.

The deal, brokered by the United Nations and Turkey last July, aimed to alleviate a global food crisis by allowing Ukrainian grain blocked by the Russia-Ukraine conflict to be exported safely.

WHY IS IT IMPORTANT?

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Ukraine is a major producer of grains and oilseeds and the interruption to its exports at the outbreak of war pushed global food prices to record highs. The deal, agreed in July 2022 some five months after the war started, helped to bring down prices and ease a global food crisis.

Ukraine grain has also played a direct role with 725,200 tonnes, or 2.2%, of the supplies shipped through the corridor used by the United Nations World Food Programme (WFP) as aid to countries such as Ethiopia, Somalia and Yemen.

WHAT DOES THIS MEAN FOR FOOD PRICES?

Prices for grains and oilseeds have already risen in response to news that Russia will suspend its participation in the deal. The increase will lead to higher prices for staple foods, such as bread and pasta, in the coming months.

The situation, however, is better than in the months after the war started as supplies of grain from other producers such as Brazil and Russia have increased.

Prices for wheat, the main ingredient in bread, have fallen by about 14% so far this year and corn is down around 23%.

The current global food crisis, however, is far from over. The WFP said last month that multiple emergencies had overlapped creating the largest and most complex hunger and humanitarian crisis in more than 70 years.

In 2022, a record 349 million people experienced acute hunger and 772,000 teetered on the edge of famine, the WFP said in an annual review.

WHAT IS THE STATE OF GLOBAL FOOD SUPPLIES?

Global corn stocks began the 2021/22 season at a six-year low and so Russia's invasion of Ukraine, one of the world's top corn exporters, led to a significant jump in prices.

A sharp increase in exports from Brazil, however, has since helped to boost supplies along with the export of nearly 17 million tonnes of corn through the corridor.

The U.S. Department of Agriculture has forecast global corn stocks by the end of the 2023/24 season will be at a five-year high.

Global wheat stocks are tighter and are forecast to be at an eight-year low at the end of the 2023/24 season, USDA data shows.

WHAT WOULD IT MEAN FOR THE WORLD FOOD PROGRAMME?

The WFP buys several million tonnes of food commodities every year of which about 75% are grains.

In 2021, WFP purchases totalled 4.4 million tonnes with Ukraine its top source, providing 20% of the total.

Ukraine mainly supplies wheat and split peas.

Most of the food goes to Africa along with some countries in Western Asia such as Yemen and so the WFP tends to source most supplies from eastern Europe, which is closer than major producers in North or South America.

The WFP has shipped 725,200 metric tonnes through the corridor. It will have to look elsewhere, potentially at a higher cost when a funding shortfall has already forced it to reduce activities in some countries.

WHAT HAS BEEN EXPORTED?

Under the pact to create a safe shipping channel, Ukraine has been able to export 32.9 million tonnes of agricultural products, including 16.9 million tonnes of corn and 8.9 million tonnes of wheat.

Before the conflict, Ukraine was exporting roughly 25 to 30 million tonnes of corn a year, mostly through the Black Sea, and 16 to 21 million tonnes of wheat.

The capacity to ship grain through the Black Sea under the pact has been limited by the inclusion of only three ports.

For a full breakdown of the countries and quantities exported:

WHY IS RUSSIA WITHDRAWING FROM THE PACT?

Russia has repeatedly said it sees no reason to extend the deal. It says commitments made to remove obstacles to Russian food and fertiliser exports have not been fulfilled.

Moscow's demands have included the reconnection of Russian Agricultural Bank (Rosselkhozbank) to the SWIFT payment system.

Other demands include the resumption of supplies of agricultural machinery and parts, lifting restrictions on insurance and reinsurance, the resumption of the Togliatti-Odesa ammonia pipeline and the unblocking of assets and the accounts of Russian companies involved in food and fertiliser exports.

CAN THE CORRIDOR OPERATE WITHOUT RUSSIA?

Ukraine's ports were blocked until the agreement was reached in July last year and it is unclear if it will be possible to ship grain now Russia is withdrawing from the pact.

Additional war risk insurance premiums, which are charged when entering the Black Sea area, would go up and shipowners could prove reluctant to allow their vessels to enter a war zone without Russia's agreement.

Insurance industry sources say that cover arrangements could alter quickly. War risk insurance policies need to be renewed every seven days for ships, costing thousands of dollars.

IS THE CORRIDOR NEEDED IF UKRAINE'S HARVESTS SHRINK?

Ukraine's grain exports are forecast to fall in the 2023/24 season after the war meant farmers planted less corn and wheat.

The U.S. Department of Agriculture has forecast corn exports will drop to 19.5 million tonnes, down from the prior season's 28 million and well below the record 30.3 million shipped in the 2018/19 season when they accounted for 17% of global trade.

Wheat exports are expected to fall to 10.5 million tonnes, down from the prior season's 16.8 million and well below a peak of 21 million in 2019/20 that represented 11% of world trade.

Exporting even those lower volumes of grain through the eastern European Union would, however, be logistically difficult and expensive particularly for crops grown in eastern regions of Ukraine that face a long and difficult journey just to reach the border.

CAN UKRAINE EXPORT MORE GRAIN THROUGH THE EU?

Ukraine has been exporting substantial volumes of grain through eastern EU countries since the conflict began. There have, however, been many logistical challenges including different rail gauges.

Another issue is that the flow of Ukraine grain through the eastern EU has caused unrest among farmers in the region who say it has undercut local supplies and been purchased by mills, leaving them without a market for their crops.

As a result the EU has allowed five countries - Bulgaria, Hungary, Poland, Romania and Slovakia - to ban domestic sales of Ukrainian wheat, corn, rapeseed and sunflower seeds, while allowing transit for export elsewhere. As it stands this will be phased out by mid-September.

Larger harvests are also expected in the eastern EU this summer and major ports such as Constanta in Romania are expected to struggle to handle the volume of grain it is likely to receive, leading to congestion and shipping delays.

World+Biz

Black Sea grain deal / Russia / grain

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Chief Adviser Muhammad Yunus speaks at the Chatham House in London on 11 June 2025. Photo: CA Press Wing
    CA Yunus outlines challenges, opportunities facing Bangladesh at Chatham House
  • File Photo: TBS
    DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • A man in a car uses his mobile phone as members of law enfocement stand guard on a road after curfew, as protests against federal immigration sweeps continue, in downtown Los Angeles, California, US June 10, 2025. REUTERS/Leah Millis
    Trump wants to 'liberate' Los Angeles, residents say 'no thanks'

MOST VIEWED

  • Illustration: Duniya Jahan/ TBS
    Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon
  • A file photo of Bangladesh Bank Governor Dr Ahsan H Mansur. Photo: Collected
    'I have no relation with this': Ahsan Mansur debunks Joy’s allegations over daughter’s Dubai flat
  • Faiz Ahmad Tayeb. Photo: BSS
    Import duty on raw materials for e-bikes, lithium batteries reduced from 80% to 1% in some cases: Faiz Taiyeb
  • Screengrab from video shows a group of local youths forcing tourists to leave a tourist spot in Utmachhra area of Sylhet's Companiganj on Sunday, 8 June 2025, citing allegations of obscene activities and environmental damage
    Locals declare tourist spot in Sylhet 'closed', force visitors to leave
  • Shakil Ahmed. Photo: Collected
    DU student allegedly hangs himself following threats over old derogatory comment about Prophet on Facebook
  • Photo shows the Land Cruiser Prado car belonging to former member of parliament (MP) Anwarul Azim Anar found in Kushtia. Photo: TBS
    Luxury car of ex-AL MP Anar, who was killed in Kolkata, found in Kushtia

Related News

  • Russia says it is ready to remove excess nuclear materials from Iran
  • Russia drones hit Kharkiv and other parts of Ukraine, killing 2
  • Russia fines Apple for violating 'LGBT propaganda' law, TASS reports
  • Russia's latest drone strikes hit Kyiv, maternity ward in Odesa, says Ukraine
  • Russia responds to Trump-Musk feud with jokes, jibes and job offers

Features

Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

21h | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

2d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

4d | Bangladesh
Illustration: TBS

Unbearable weight of the white coat: The mental health crisis in our medical colleges

6d | Panorama

More Videos from TBS

US-China London meeting ends as planned

US-China London meeting ends as planned

36m | TBS World
When will the heat wave subside?

When will the heat wave subside?

1h | TBS Today
Covid-19 testing to resume at hospitals amid rising infections

Covid-19 testing to resume at hospitals amid rising infections

2h | TBS Today
Curfew ordered in downtown Los Angeles after looting and vandalism

Curfew ordered in downtown Los Angeles after looting and vandalism

3h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net