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Russia suspends Ukrainian grain trade.What It Means for Food Prices – Nationwide

Russia has suspended some of the deals that would allow Ukraine to safely transport grain from its Black Sea ports, and the remaining partners now appear to be left to take their chances.

On Monday, Ukraine said more than a dozen ships had sailed despite first reporting more than 200 were loaded and ready to travel after Russia’s weekend announcement. rice field. Such exports are very important. Ukraine and Russia are important global suppliers of wheat, barley, sunflower oil and other foodstuffs to some countries in Africa, the Middle East and Asia.

It is not immediately clear who will risk sailing out of Ukraine without Russian protection after Moscow claims a Ukrainian drone attack on the Black Sea Fleet. states that it is impossible to guarantee the safety of navigation in the areas mentioned,” he said, adding that implementation of the grain agreement is “hardly feasible”.

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Russia’s decision has implications for a world increasingly concerned about food security and high food prices.

What did the contract achieve?

The grain initiative has become a rare example of cooperation between Ukraine and Russia since Russia invaded in February. Through the intermediation of the United Nations and Turkey, so far he has managed to safely leave Ukrainian ports with more than 9 million tons of grain on 397 ships. The cereals deal has cut global food prices by about 15% from their peak in March, prompting the UN secretary-general to urge Russia and Ukraine to renew the deal, which expires on November 19, according to the UN.

Wheat futures prices surged more than 5% in Chicago on Monday after Russia’s announcement, while key oil futures prices rose in Asian markets. Tight global markets have pushed prices up and forced poorer countries to pay more to import grain, says Joseph Glauber, senior research fellow at the International Food Policy Institute in Washington. said he would have to.

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Ukrainian grain leaves ports despite Russia’s withdrawal from deal

Before the grain trade was brokered, the United States and Europe accused Russia of starving vulnerable parts of the world by refusing exports. most of the grain it produces goes to Europe, not to the world’s hungriest countries.

But the United Nations Conference on Trade and Development said in a report released last week that wheat is mostly exported to poorer countries, with nearly 20% of exported wheat going to the least developed countries.

Ukraine said more than 5 million tons were exported to African and Asian countries and 190,000 tons of wheat to countries receiving relief from the UN World Food Programme.

What about ships that are still moving?

A ship carrying 30,000 tonnes of wheat destined for Ethiopia under the program set sail on Monday, Ukraine said. This is one of her 12 ships carrying more than 354,000 tons of agricultural products, she said, after the United Nations and Turkey agreed to allow the vessel to pass humanitarian aid. . hall. Ethiopia, along with neighboring Somalia and Kenya, has been severely affected by the region’s worst drought in decades.

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Glauber, a former chief economist at the U.S. Department of Agriculture, said the question was whether the new ships would risk sailing without Russia’s security guarantees.

“I think the answer is no,” he said. “For the insurance companies and others who are insuring these boats … rates will go up and probably be exorbitant.”

William Osnato, senior research analyst at agricultural data and analytics firm Gro Intelligence, reiterated that the vessel tracking map does not show any vessels heading to Odesa.

A spokesman for the Joint Coordination Center, which oversees ship logistics and inspections, did not immediately answer questions about which ships might be in service.

Asked about Turkey’s intention to continue implementing the deal without Russia’s participation, a Kremlin spokesman simply said, “We are continuing to contact not only the United Nations, but also the Turkish side.”

Russia asked the UN Security Council on Monday to discuss the issue, offering to supply up to 500,000 tons of grain “for the next four months, free of charge to the poorest countries.”

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Sanctions on Russia will not affect grain exports, and while a parallel wartime agreement was meant to pave the way for Moscow’s food and fertilizer shipments, some companies are alarmed.

Ukraine, the US and allies have again accused Russia of playing the “Hunger Games”.

Developing countries will have to find new suppliers and pay more from countries where dry conditions and rains are causing problems, such as the United States, Argentina and Australia, Glauber said. , higher prices mean that growers are planting more, and countries that are not typically large wheat exporters, such as Brazil and India, are shipping more wheat.

“What the world needs is a really big crop,” he said, noting that Ukraine accounts for 10% of world wheat exports and “that’s a big hole to build.”


Click to play video: 'First Ukrainian grain export ship since Russian aggression began'

First ship for Ukrainian grain exports set sail for first time since Russian invasion began


What else affects food supplies?

Peter Meyer, head of grain and oilseeds analysis at S&P Global Platts, said he does not believe the Russian decision will have a lasting impact on corn and grain prices and supplies. Commodity traders were skeptical that trading would continue, he said, one reason why corn prices have risen rather than fallen since a deal was reached in July.

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Grain markets are eyeing other issues, including slowing U.S. agricultural exports due to low water levels in the Mississippi River, a slump in corn production in the western U.S. and the threat of a U.S. railroad strike, Mayer said.

But in parts of the African continent where prices remain high, concerns are rising again.

Sean Ferris, a Kenya-based adviser on agriculture and markets for Catholic Relief Services, a distribution partner of the United Nations World Food Program (WFP), said: “This will bring another small shockwave to the market. I think prices will go up in the meantime,” he said. “This means that prices in East Africa, which have hit record highs, will not fall any time soon.”

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Global food shortage fears loom as Russia withdraws from Ukraine grain deal

After four failed rainy seasons in the Horn of Africa, millions are starving and millions of livestock, a vital source of food and wealth, are dying. Meadows have disappeared. Ferris spoke with a company that is sending hundreds of tons of processed feed to northern Kenya to keep emaciated animals alive.

The recent setback in Ukrainian exports is another layer of stress on the food security system, he said.

In poorer countries of North Africa and the Middle East, where bread is an important part of people’s diets, rice in Asia and elsewhere in Africa may not have alternatives like sorghum. It wreaks havoc on the grounds that fueled the Arab Spring riots.

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“We have wheat, but it will sell at a high price,” he said.

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Bonnell reported from London. Contributed by his AP reporter Paul Wiseman in Washington and his girlfriend Hanna Arhirova in Kyiv, Ukraine.



Russia suspends Ukrainian grain trade.What It Means for Food Prices – Nationwide

Source link Russia suspends Ukrainian grain trade.What It Means for Food Prices – Nationwide

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