On July 22nd, 2022, in Istanbul, the Black Sea Grain initiative was signed, ratified by the two warring nations of Ukraine and Russia, as well as both Turkey and the United Nations. This marks the first major deal signed by the two countries since the invasion began in early 2022. The content of the deal includes the safe passage of millions of tonnes of grain, currently trapped in Ukraine by the war. The deal was signed in response to the global 2022 food crisis, due to the large rise in the price of fertilizers as well as commodities such as wheat and soybean. To understand the importance of this deal towards alleviating the food crisis, we must first understand the background, and the countries most affected by it as well as the aftermath of the deal and its importance in pushing toward more peace agreements between Russia and Ukraine.
During the course of the invasion, one of the tactics Russia used is to place blockades on Ukrainian ports. Volodymyr Omelyan, Ukraine’s infrastructure minister said by using this tactic, “Russia hopes to drive Ukraine out of our own territory.” This blockade meant that Ukraine was unable to export grain and other foodstuffs out of the country, causing a large fall in supply. This fall in supply has caused a large increase in the price of these goods, due to the supply not being able to keep up with the large global demand. This has caused the price of wheat to rise dramatically when compared to the price of what in the previous few years, which have remained low and stable. This rise in price can be shown by the graph below, which shows the global price of wheat from 2008 to 2022:
Global Price of Wheat from 2008 to 2022
The increase in the price of wheat caused by the invasion reached a maximum of $12, a level not seen since 2008 when a global recession also caused food prices to increase in a similar manner. However, this increase in prices will not have a uniformly negative effect on all countries, countries that import a large majority of their grain from Ukraine will fare much worse than countries less reliant on Ukrainian exports.
As we can see from the graph above Ukraine mainly exports to countries in the middle east, North Africa, South Asia, and South-East Asia. 60% of these countries are also classed as low/lower-middle-income countries by the World Bank, putting further pressure on certain countries trying to deal with the crisis. The effect of this rise in food prices can also be seen in countries such as Iran which has been facing large and violent protests in response to these prices.
After the signing of the deal, wheat prices started steadily dropping, reaching the same price level as before the war started. This signifies the start of the easing of the crisis. Global reactions to the deal have also been positive from both the UN and countries such as the UK and Canada. However, scepticism still remains concerning Russia’s ability to hold their side of the deal, with Liz Truss, UK foreign secretary at the time of the agreement stating that the UK “will be watching to ensure Russia’s actions match its words,” As well as US state department spokesman Ned Price saying that Washington will be “holding Russia accountable for implementing this agreement.”
Since the signing of the deal, on the 1st of August 2022, the first ship left the Black Sea port of Odesa for the first time in months carrying 26,000 tonnes of Ukrainian corn towards Lebanon, the second most reliant on Ukrainian wheat. For many people, this ship signifies hope, not only to the people suffering from the increasing wheat price but also to the countless people affected by this conflict. However, this hope entirely rests on Russia’s ability to keep their side of the agreement, and if they do, many hope that this will lead to further peace agreements between the warring nations in the future.
Edited and Reviewed by Tanish Bagga.
References/ Further Reading
· Flora Drury, BBC, 2022, “Ukraine War: Deal signed to allow grain exports to resume by sea”, https://www.bbc.com/news/world-europe-62268070.amp
· Reuters Staff, 2022, “Russia blocks Ukrainian Azov sea ports: minister”, https://www.reuters.com/article/us-ukraine-crisis-azov-blockade-idUSKCN1NY0NO
· The World Bank, 2021, “The world by income and region”, https://datatopics.worldbank.org/world-development-indicators/the-world-by-income-and-region.html
· Russian News Agency, 2022, “UK vows to watch to ensure UK implements Grain deal”, https://tass.com/world/1483809
· By Rob Picheta, Jomana Karadsheh, Radina Gigova and Tim Lister, CNN, “Kyiv and Moscow agree deal to resume grain exports from Black Sea Ports”, https://edition.cnn.com/2022/07/22/europe/ukraine-russia-grain-deal-turkey-intl/index.html