LONDON – Russia on Monday halted a landmark war deal that would allow grain shipments from Ukraine to countries in Africa, the Middle East and Asia where hunger is a growing threat and high food prices have pushed more people into poverty.
Kremlin spokesman Dmitry Peskov said Russia will suspend the Black Sea Grains Initiative until its demands to provide the world with its own food and fertilizers are met. As Russia laments that restrictions on transportation and insurance have hampered its agricultural exports, the country has been shipping record quantities of wheat.
“If the part of the Black Sea Agreement related to Russia is implemented, Russia will immediately return to the implementation of the agreement,” Peskov said.
The suspension marks the end of an agreement the United Nations and Turkey negotiated last summer to allow food exports from the Black Sea region after Russia’s invasion of its neighbor exacerbated a global food crisis. The initiative is credited with helping bring down rising prices for wheat, vegetable oil and other food items.
Ukraine and Russia are both major global suppliers of wheat, barley, sunflower oil and other affordable foods that developing countries depend on.
The grain deal offered assurances that ships entering and leaving Ukrainian ports would not be attacked, while a separate agreement facilitated the movement of Russian food and fertilizer. While Western sanctions do not apply to Moscow’s agricultural supplies, some companies were initially reluctant to do business with Russia because of the measures.
Ukrainian authorities did not immediately respond to requests for comment on Monday.
The suspension of the deal sent wheat prices up about 3% in Chicago trading to $6.81 a bushel. Analysts expect little more than a temporary spike in food prices as countries like Russia and Brazil have increased wheat and corn exports but growing food insecurity around the world.
The Black Sea Grain Initiative has enabled three Ukrainian ports to export 32.9 million tons of grain and other food to the world, more than half of it to developing countries, according to the Istanbul-based Joint Coordination Center.
The deal was extended by 60 days in May, but the amount of food shipped and the number of ships leaving Ukraine have both fallen sharply in recent months, with Russia accused of banning more ships from participating.
The war in Ukraine sent food commodity prices to record highs last year, contributing to a global food crisis that is also linked to other conflicts, the ongoing impact of the COVID-19 pandemic, drought and other climate factors.
High costs of grains, a staple food in countries like Egypt, Lebanon and Nigeria, exacerbated economic challenges and helped push millions more into poverty or food insecurity.
Rising food prices are disproportionately affecting people in developing countries as they spend more of their money on meals. Poorer countries that depend on importing food at dollar prices are also spending more as their currencies weaken and climate change forces them to import more. Places like Somalia, Kenya, Morocco and Tunisia are struggling with drought.
Under the deal, global food prices like wheat and vegetable oil have fallen, but food was expensive in Ukraine even before the war and the relief hasn’t filtered down to kitchen tables.
“The Black Sea Agreement is critical to the food security of a number of countries,” and its failure will exacerbate problems for those grappling with high debt levels and climate impacts, said Simon Evenett, professor of international trade and economic development at the university St Gallen in Switzerland.
The UN’s Food and Agriculture Organization said this month that 45 countries are in need of external food aid, with high local food prices there being “one reason for the worrying famine”.
The grain agreement has suffered setbacks since it was brokered by the UN and Turkey: Russia withdrew briefly in November, but then rejoined and extended the agreement.
In March and May, Russia extended the agreement by just 60 days instead of the usual 120. The amount of grain shipped each month fell from a peak of 4.2 million tons in October to 1.3 million tons in May, the lowest volume on record of the deal.
Exports jumped to just over 2 million tons in June thanks to larger ships that could carry more cargo.
Ukraine accuses Russia of preventing new ships from participating in the work since the end of June. Joint inspections, designed to ensure ships were only carrying grain and not weapons that could help either side, have also slowed significantly.
Asked Monday whether an attack on a bridge connecting the Crimean peninsula with Russia was a factor in deciding the grain deal, the Kremlin spokesman replied that it was not.
Meanwhile, Russia’s wheat shipments hit an all-time high after a big harvest. The US Department of Agriculture estimates that 45.5 million tons were exported in the 2022–2023 trade year. Another record of 47.5 million tons is expected in 2023-2024.
View AP’s full coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine and the food crisis at https://apnews.com/hub/food-crisis.
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