Current Affairs

Since the beginning of the Russian invasion of Ukraine , Ukrainian exports have been seriously disrupted. The Russian Navy blockaded Ukrainian ports for four months and on the 22^nd July 2022, Russia came to an agreement brokered by the United Nations and Turkey to open a safe maritime route for Ukrainian grain. But Russia has reneged on the bi-monthly deal and has closed down the seaway that could safely lead to grain ships being loaded in Ukraine with grain.

The last grain ship to leave Ukrainian waters safely was the TQ Samsun, which travelled to Istanbul. The grain deal that had promised safe passage from Ukrainian ports ended on 16th July 2023. In a Press Conference Vladamir Putin argued that the failure of the deal had been because of the failure to remove obstacles to Russia’s food exports and provisions that had not been met in the agreement.

The UN Secretary General Antonio Guterres, reacting to the end of the agreement said that the organisation would look for solutions to the rise of “human suffering.” […] “There is simply to much at stake in a hungry and hurting world”

In a report by the European Council they estimated that during the grain deal, Ukraine had managed to export 30 million tonnes of grain. Fifty percent of this amount was maize, which is an important grain to stave off famine. Ukraine exported 64 percent of its wheat and 51 percent of its maize production to developing nations and the United Nations World Food Programme brought half their grain stock from Ukraine. Since the initiative which allowed Ukraine to export their grain, over 725,000 tonnes of wheat has been exported to Ethiopia, Yemen, Afghanistan, Sudan, Somalia, Kenya and Djibouti.

Russia’s invasion of Ukraine significantly increased the price of foodstuffs as grain is important not just in making bread but also as feeds in commercial agriculture. Prices have been significantly affected and risen by 23 percent above the market price at the beginning of the conflict. Grain poverty has pushed people to buy less bread and other foods reliant on Ukrainian grain. In an interview with the BBC, Burnhan Morkoc, a baker in Turkey, said “everything is so expensive…[…} flour is up nearly 500%, yeast 255% and sesame seeds are 150% more expensive.” Though the argument is a lot to do with Turkey’s economy, the EU and Africa have been affected by the inflationary pressures due to the shortage of Ukrainian grain across the world.

Korir Sing Oei, Kenya’s top civil servant in Kenya’s foreign affairs ministry, said in a tweet that “The decision by Russia to exit the Black Sea grain initiative is a stab in the back of global food security and disproportionately impacts countries in the Horn of Africa already impacted by drought.”

Russia has complained that the deal for Ukrainian grain was caused by Western sanctions against Russia. The Russian Foreign Ministry argued that the West was “openly sabotag[ing] the deal and was selfishly putting the commercial interests of the deal ahead of its humanitarian goals.” But there aren’t any sanctions against Russian agriculture, just an awareness by countries that there are board members who have been sanctioned and also difficulty in buying Russian grain on the open market.

Since the agreement to allow Ukrainian grain safe passage, 32 million tonnes of Ukrainian grain has been exported, which has deflated the price of grain by 11.6 percent. Russia has also argued that Ukrainian grain was not reaching the poorest nations, however the United Nations have been one of the largest buyers of Ukrainian grain, which has been sent to Yemen, Somalia and other places that are at war or in food crisis.

Russia wants barriers removed from Russian grain, they also want the Swift banking system in place, so Russian grain and fertilizers can be openly traded on the international market. The United Nations and the United States have argued that Russia could receive payment for their fertilizer and grain sales through International banks, but this arrangement has been rejected by the Kremlin, who want Swift payment systems for the countries that are willing to buy Russian grain and fertilizer.

According to Carnegie, the Ukrainians have been preparing for the grain deal to be cancelled and had contacted carriers and insurers offering to underwrite the safety of the cargoes through a $547 million surety. But Russia has not only bombed Ukrainian ports they have threatened to sink any cargo ships in International waters carrying Ukrainian grain.

Russia has said that it will export a million tonnes of grain to the poorest in Africa if the grain agreement between Russia, Turkey and the United Nations fell through. Ngozi Okonjo-Iweala who heads the World Trade Organisation said that food, feed and fertilizer were “critical to the stability of global food prices’ and hoped that the deal will be kept alive and Moscow would reconsider pulling out of the agreement.

There are other arguments that Russia must come to terms with and that is how much China and Turkey trade with Russia and are determined by Ukrainian grain imports. China in its peace initiative made the grain deal separate from the peace process, because of the importance of Ukrainian grain to the Chinese economy. Turkey which according to Carnegie, exports $5billion to Russia and imports $27 billion of Russian products, has gained important status in the Russian export market, which places pressure on Russia to continue the agreement with Turkey and the UN.

The EU has found alternative routes for Ukraine to export its grain, but this has also depressed the markets in some of the EU nations which have found their markets squeezed by the amount of Ukrainian grain entering the country. The EU has come to agreement with these countries to limit the internal importation of Ukrainian grain and bypass these markets and develop structures that can export Ukrainian grain worldwide. Nikolai Gorbachev, the President of the Ukrainian grain association has said that his members had found alternative routes. The Danube has been pressed into service and Ukrainian grain is being barged through eastern Europe to sea ports and markets worldwide.

Whether Russia is serious or not, there are arguments that Russia cannot ignore. Its determination to challenge the world through the strangulation of export routes has been countered by Ukrainians finding other ways to manage the export of its grain. But the necessity of Ukrainian grain for the poorest will affect their ability to manage these exports. Ukraine has found a means to argue for the continued export of grain by under-writing the insurance costs, but Russia’s unpredictability in the war, challenges whether the grain will continue to flow or not through the Black Sea. But it is Russia’s closest allies who will come to the table and motion for the Russians to continue allowing Ukrainian grain to be exported.