Understanding the Implications of No Black Sea Grain Deal

Russia said Monday it is ending its participation in a wartime deal that allowed Ukraine safe passage to export grain from three Ukrainian ports past Russian warships on the Black Sea. 

Here is a look at how the grain deal worked and what Russia’s withdrawal from the agreement will mean for both Moscow and Kyiv as well as the global food supply. 

What is the grain deal?

The United Nations and Turkey brokered the deal to allow grain to be shipped from Ukraine, despite Russia’s ongoing war in that country. Much of the exported grain was shipped to impoverished countries in Africa, the Middle East and Asia. The deal also allowed for Russia to ship food and fertilizer throughout the world despite Western sanctions on Moscow.

When did the agreement begin? 

The nearly year-old deal was reached in July 2022 and was meant to be extended every four months. It was renewed three times, but the last two renewals were for only two months each as Russia complained of obstacles to exporting its food and fertilizer. 

Why did Russia withdrawal from the pact? 

Russia has repeatedly said it was not benefiting enough under the initiative. Ukraine and Russia are both major global suppliers of wheat, barley, sunflower oil and other affordable food products. One of Russia’s main demands has been for its agriculture bank to be reinstated in the SWIFT system of financial transactions.    

What was the effect of the deal?

After Russia’s February 2022 invasion of Ukraine — considered the breadbasket of Europe — grain prices rose worldwide. The U.N. gain deal, brokered five months after the war began, helped to bring down global food prices. The U.N. said that since exports from the pact began in August 2022, 32.9 metric tons of food commodities have been exported to 45 countries.

Will food prices rise again? 

Experts say not renewing the Black Sea grain deal could cause food prices to again climb. However, they say the worldwide food situation is not as volatile as it was last year because other countries are now producing more grain to counterbalance losses from Ukraine, including Argentina, Brazil, and European nations. 

Can Ukraine still ship from the Black Sea?

It is not clear if Russia will block Ukrainian ports following its withdrawal from the grain deal. However, even if Russia does not block or attack Ukrainian ships carrying food supplies, ship owners will surely see increased insurance premiums to enter the Black Sea and are likely to be reluctant for their vessels to pass through a war zone without assurances of safety. 

Can Ukraine send more grain through Europe? 

Ukraine has been sending large amounts of grain through eastern European countries since the conflict began; however, these routes — both land and river — handle lower amounts compared to sea shipments. Ukraine’s shipments through Europe have also prompted anger from some European countries that say the shipments have undercut local supplies. As a result, five EU countries — Bulgaria, Hungary, Poland, Romania and Slovakia — have banned domestic sales of some Ukrainian grains.

What does the deal’s end mean for the World Food Program?

The U.N. World Food Program says grain from Ukraine has played an important role in its efforts to distribute food to those in need. The U.N. agency says the grain initiative has allowed it to ship more than 725,200 tons of grain to relieve hunger around the world, including to Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen. 

Some information in this report came from The Associated Press and Reuters.
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