Russia Pulls Out Of Black Sea Grain Deal. How It Will Impact Global Food Prices

Russia held Ukraine responsible for this alleging that the deal was suspended in the wake of recent drone attacks on its fleet in Crimea.

UN-brokered Black Sea grain deal: Russia has decided to call off the UN-brokered Black Sea grain deal which has seen more than 9 million tons of grain exported from Ukraine and brought down global food prices. Russia held Ukraine responsible for this alleging that the deal was suspended in the wake of recent drone attacks on its fleet in Crimea. This is a big blow to attempts to ease the global food crisis. Ukrainian President Volodymyr Zelenskiy said what he called Russia’s nonsensical move required a strong international response from the UN and the Group of 20 major economies.

What Is Black Sea Grain Deal

A United Nations-backed deal brokered in July eased Russia’s naval blockade and saw the reopening of three key Ukrainian ports. The first vessel left Ukraine’s port of Odesa on August 1 carrying more than 26,000 metric tons of corn. Since Russia and Ukraine signed the UN-backed Black Sea Grain Initiative in Turkey on July 22, more than 9 million tonnes of corn, wheat, sunflower products, barley, rapeseed and soya have been exported.

The UN-led Initiative was aimed at stabilising and subsequently lowering global food prices and moving precious grain from one of the world’s breadbaskets to the tables of those in need.

Why Russia Pulled Out Of The Deal

Russia has blamed Ukraine and Britain for the suspension of this deal. According to Moscow, Ukraine launched a massive drone attack on the Black Sea Fleet in Sevastopol, Crimea. Without providing evidence, Russia also accused British troops of being involved in Saturday’s attack. It also accused the UK of blowing up gas pipelines last month. Ukraine has denied the claims of the attack and President Volodymyr Zelensky called the Russian move “rather predictable”.

In its response, the UK Ministry of Defence (MoD) said Russia was “peddling false claims of an epic scale”. A statement by the foreign ministry in Moscow said: “The Russian side cannot guarantee the safety of civilian dry cargo ships participating in the ‘Black Sea Initiative’, and suspends its implementation from today for an indefinite period.”

How It Will Impact Global Food Prices

1. The Black Sea Grain Initiative aims to reintroduce vital food and fertilizer exports from Ukraine to the rest of the world.
2. This initiative has been touted as very critical for bringing food security across the globe.
3. If the farmers don’t get food and fertilizers now, it will endanger crops in all regions of the world in 2023 and 2024.
4. If the food, fertilisers and grain don’t reach the farmers across the globe in time it will lead to a dramatic effect on food production and food prices worldwide.
5. The initiative also contributed to the lowering of the price of wheat and other commodities, which had soared following Russia’s invasion of Ukraine.
6. According to UN estimates this initiative has prevented some 100 million people from falling into extreme poverty.

US President Joe Biden ‘Outraged’

US President Joe Biden denounced the move as “purely outrageous” and said it would increase starvation. Biden said there is “no reason for them to do that”, news agency AFP reported. “There’s no merit to what they’re doing. The UN negotiated that deal and that should be the end of it,” Biden said