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Russia and Ukraine Extend Their Grain Agreement, Benefiting Food Prices Globally

Russia and Ukraine Extend Their Grain Agreement, Benefiting Food Prices Globally

Russia and Ukraine Extend Their Grain Agreement, Benefiting Food Prices Globally

  • 24-Nov-2022 2:02 PM
  • Journalist: Patricia Jose Perez

Europe: Russia and Ukraine are essential global Grain providers such as wheat, barley, sunflower oil, and other items in Africa, the Middle East, and portions of Asia where millions of hungry people live in poverty. Prior to the war, Russia also led the world in fertilizer exports. After Russia invaded Ukraine on February 24, a loss of such supplies caused food prices to rise globally and stoked worries about a famine crisis in developing nations.

The agreement that Russia and Ukraine struck on July 22 with the UN and Turkey separately was set to expire on November 19. António Guterres, the UN secretary general, and the President of Ukraine each independently announced the extension. In a crucial move in the worldwide fight against the food crisis, Russia and Ukraine decided to prolong the Black Sea Grain initiative, or the agreement on Grain exports, for an additional four months. As part of the agreement, Ukraine resumed exporting Grain through its ports in the Odesa region, and Moscow obtained guarantees for its own exports of Grain and fertilizer. When Russia momentarily opted to withdraw in October 2022, saying that Ukrainian missiles had targeted its ships in the Black Sea, the agreement was in jeopardy. Russia asserted that the Ukrainians had misused the Grain agreement to start the attack. Russia also brought up the matter of the West's non-compliance with the clauses related to loosening the restrictions placed on Russian agricultural exports.

The recent removal of Russia from the agreement had rekindled concerns about world hunger and food costs, as the inability to transport Grain from Ukrainian ports directly contributed to increases in food prices. Russian officials had earlier expressed displeasure with the agreement and mentioned dangers to their ships because of what they claimed was a drone strike by the Ukrainian military on the Black Sea Fleet.

According to the ChemAnalyst database, it is anticipated that the extension of the deal would further bring down food and fertilizer prices and avoid a global food crisis in the upcoming months.

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