Ukraine has been dubbed “the breadbasket of Europe.” That’s due to the tens of millions of tons of grain, corn, wheat, barley and other food products it ships to more than 40 countries.
One of the biggest concerns countries around the world had when Russia began its invasion of Ukraine early last year was their ability to continue receiving grain and other food products.
With Russian President Vladimir Putin’s recent refusal to renew an agreement that allowed food shipments from Ukraine, those fears are being realized once again.
Among the problems this could cause for Americans and those in other countries are supply chain disruptions, food shortages, and higher prices.
The now-expired agreement, known as the Black Sea Grain Initiative, involved Russia’s promise not to attack Ukraine’s food-carrying ships. But now, will those ships be allowed to leave Ukraine safely?
Deal Was Good While It Lasted
For the past year, the deal helped to at least delay the worsening of global hunger. United Nations Secretary-General António Guterres called it “a beacon of hope” when it was established.
Now, all bets are off. If grain and other food products are not allowed to leave Ukraine, many countries will be negatively impacted and millions could starve. Where grain is available, prices are likely to soar.
The Black Sea Grain Initiative, which had been brokered by Turkey and the UN, allowed food shipments from three Ukrainian ports without Russian interference.
During the past year, ships from those three ports made more than 1,000 voyages and carried about 32.8 million tons of food. That’s according to the Joint Coordination Center in Istanbul, Turkey.
Russia Calls Agreement End a ‘Termination’
Just prior to the end of the agreement, Turkish President Recep Tayyip Erdogan said he and Putin were on the same page regarding the deal. And that he was confident the Russian president would renew it. Not so fast.
Dmitry Peskov is a Kremlin spokesperson. He said the UN has not lived up to its part of the agreement. Sanctions against Russia have resulted in the country’s inability to export as much of its food and fertilizer as it would like.
Peskov told the Associated Press, “When the part of the Black Sea deal related to Russia is implemented, Russia will immediately return to the implementation of the deal.” But another Russian official was less optimistic, calling the lack of a renewal a “termination.”
Economic experts have said Ukraine’s ability to ship grain and other food products to many countries around the world has resulted in lessening the global food crisis. And kept prices for items such as wheat and vegetable oil from skyrocketing.
Ukraine Will Call Russia’s Bluff
Guterres said he fears that the ending of the deal will result in more human suffering. But that he’s determined to keep working to continue the flow of food out of Ukraine. He said, “There is simply too much at stake in a hungry and hurting world.
The response from the United States also centered around human suffering. John Kirby, White House national security spokesman, said Russia’s decision would “harm millions of vulnerable people around the world.”
So, the first big question now is, will Ukraine continue to attempt to ship grain and other food products from those three designated ports?
Ukraine President Volodymyr Zelenskyy said that is exactly what will happen. “We are not afraid,” he said. He added that shipping companies have told him they’re willing to continue.
Black Sea Area Becomes ‘Dangerous’
How Russia will respond to continued food shipments is the second big question. Putin has repeatedly demonstrated that angering the rest of the world does not concern him.
And right on cue, the Russian Foreign Ministry declared the northwestern Black Sea area “temporarily dangerous.” A Russian political analyst suggested that Putin may order a strike against a Ukraine port or the placement of mines in shipping routes.
By limiting the amount of wheat and other food products exported by Ukraine, Russia could increase demand for its own exports.
Simon Evenett is a professor of international trade and economic development at the University of St. Gallen in Switzerland. He said Russia’s refusal to renew the grain deal allows the country to “weaponize” its wheat exports.
In addition to limiting competition, Russia could raise export taxes for the purpose of financing its military campaign in Ukraine.
Food Shortages & Higher Prices Expected
The Black Sea Grain Initiative has been renewed three times, but apparently Russia feels that’s enough. If Ukraine is prevented from shipping grain and other food products, the result is likely to be a major increase in global hunger and higher prices everywhere. Including in the U.S.
Adam Hodge is a spokesperson for the U.S. National Security Council. He said, “Russia’s decision to suspend participation in the Black Sea Grain Initiative will worsen food insecurity.”
Prior to the start of the war, Ukraine was the world’s largest exporter of sunflower oil. It was also among the world’s top three exporters of barley, maize, and rapeseed oil, and the fifth largest wheat exporter.
If Putin threatens the safety of ships leaving Ukraine with grain and other food items, there will be a global outcry. But will he care? History tells us the answer is no. It also tells us food shortages and higher prices are sure to follow.