Russia locked the emergency exit door to Ukraine grain deal
Russia announced Monday July 17, 2023 that it has “suspended” its participation in a deal allowing Ukraine to export grain by sea until the country’s conditions are met. The deal enabled Ukraine to supply world markets with over 32 million tonnes of food products. It will now need to find alternative routes for its exports otherwise it could send global food prices to higher level of pricing, especially for the underdeveloped economies which relied heavily on imports of Ukrainian grain and the consumers of bread and related food products. When the deal was signed and grain shipments restarted, world food prices declined by roughly 20%, according to the UN’s Food and Agriculture Organization.
“Russia exports nearly three times more wheat than Ukraine.” Ukraine is one of the world’s largest exporters of sunflower, maize, wheat and barley. Wheat, corn and soybean prices all rose after Russia’s announcement, though wheat prices are still well below their peak last May 2023.
Russia is the world’s second largest oil exporter and that almost half of its oil exports are seaborne via the Black Sea.
The UN warned last year that parts of the Middle East and Africa could fall into famine if they couldn’t get exports from Ukraine, which is sometimes called “the breadbasket of the world.” The Kremlin denied that the pause on the deal — which was set to expire Monday — was in response to an attack earlier in the day on a bridge linking Russia to occupied Crimea.
The move was immediately slammed internationally, with the U.S. ambassador to the UN calling it an “act of cruelty.” While sending cluster bombs to Ukraine was described as necessary to save Ukraine from the Russian artillery.
The White House and the Pentagon on Friday July 14, 2023 defended the Biden administration’s decision to provide Ukraine with controversial cluster munitions as part of a newly announced $800 million military aid package. National security adviser Jake Sullivan told reporters at a White House briefing that the U.S. Government will send cluster munitions, the 155mm artillery shells with dud rates no higher than 2.35%, which he contrasted with U.S. assessments that Russia’s cluster munitions have dud rates between 30% and 40%.
“We deferred the decision for as long as we could,” said Sullivan. “But there is also a massive risk of civilian harm if Russian troops and tanks roll over Ukrainian positions and take more Ukrainian territory and subjugate more Ukrainian civilians because Ukraine does not have enough artillery. That is intolerable to us.”
Denunciations and Tears of Crocodiles
Now that Russia has taken action to suspend the grain deal, in western societies we start hearing, reading and getting denunciations and see on screen Tears of Crocodiles coming out and expressing sorrow about the impact of the Russian decision on the poor countries of Africa, Middle East and Asia.
These suddenly spiritually found souls and minds of altruism and sensitivity about the poors and the hunger around the world are the neighbors of the same ones who take food from all over the underdeveloped world in many forms, means and ways without having any scrupules to damp many of it instead of giving it even to their own homeless and this just to keep the profit up and the sales climbing and even when some of them distribute the expired food, it is only for tax rebate and tax credit not for humanitarian reasons.
“#Russia‘s abrogation of this deal will cruelly and directly bring mass hunger to the poor of #Africa, the #MiddleEast, and #Asia. It will also put upward pressure on global #inflation and overall #commodity prices going forward. But this is what #Putin wants to do anyway – he’s trying to drag the rest of the world down with him and #Russia as the continue to flounder in their failed invasion of #Ukraine. #globalmarkets #geopoliticalrisk #BlackSeaGrainInitiative.“
Here is the Answer of the Russian Ambassador
Russia’s ambassador to the U.N Vassily Nebenzia said “the memorandum is simply not working,” and the U.N. has to recognize it has “no leverage to exempt Russian agricultural export operations from Western sanctions” and its efforts have not produced results. He also claimed that the Ukraine grain export deal had been transformed from a humanitarian initiative to help developing countries facing escalating food prices to a commercial operation benefiting the world’s four leading Western agro-business corporations.
“If Brussels, Washington and London are genuinely interested to continue the export of food from Ukraine through the maritime humanitarian corridor, then they have two months to exempt from their sanctions the entire chain of operations which accompany the Russian agricultural sector,” the Russian envoy said.
“Otherwise, we fail to understand how the package concept of the secretary-general of the United Nations will work through these simple agreements,” he said.
Where have Ukraine’s food exports gone?
The UN says that of all the food products Ukraine has exported under the grain deal over the past year:
- 47% have gone to “high-income countries” including Spain, Italy and the Netherlands
- 26% have gone to “upper-middle income countries” such as Turkey and China
- 27% have gone to “low and lower-middle income countries” such as Egypt, Kenya and Sudan
Russia says that Ukraine’s failure to export more grain to poorer countries is one of the reasons it pulled out of the deal.
In 2022, more than half of the grain bought by the UN’s World Food Programme came from Ukraine.
Study on Ukraine Importance in Global Food Supply
Our 2022 study “Ukraine’s Role in Global Food Supply: Individual Countries’ Vulnerabilities” is sadly topical again today with #Russia pulling out of the Black Sea #grain deal.
#Ukraine is one of the most important players in global #food supply! Since its independence in 1991, it has continuously increased crop yields of agricultural products and expanded global exports. The consequences of #Russia‘s war of aggression are now hitting not only the Ukrainian agricultural sector and economy. With reference to six key products, we show which importing countries are most affected with Russia blocking Ukrainian ports. Of 141 countries examined, more than a third are vulnerable!
Wheat futures jump 3.5% as Ukraine grain deal collapses w/Russia refuses to extend it. The move jeopardizes a key trade route from Ukraine, one of the world’s top grain and vegetable oil shippers, just as its next harvest kicks off.
Source: Bloomberg, HolgerZ
Under the initiative, U.N. Undersecretary-General for Humanitarian Affairs Martin Griffiths said, close to 25 million metric tons of foodstuff have been exported since last August, and the U.N. World Food Program has been able to transport more than half a million metric tons of wheat to support humanitarian operations in Afghanistan, Ethiopia, Kenya, Somalia and Yemen.
Griffiths also said it’s vital for the U.N.-Russia memorandum to be fully implemented.
There has been “meaningful progress, but impediments remain, notably with regard to payment systems,” he said, stressing that U.N. Secretary-General Antonio Guterres and trade chief Rebeca Grynspan “are sparing no effort to facilitate its full implementation.”
But Russia’s ambassador to the U.N Vassily Nebenzia said “the memorandum is simply not working,” and the U.N. has to recognize it has “no leverage to exempt Russian agricultural export operations from Western sanctions” and its efforts have not produced results.
Sources: Africa News, BBC,
Said Cherkaoui 24 