Russia halted a landmark deal that allowed Ukraine to export grain at a time of growing hunger

On Monday, Russia suspended a historic agreement, enabling Ukraine to export grain, as the world grapples with rising hunger and increasing poverty due to high food prices. The deal, known as the Black Sea Grain Initiative, chiefly targets nations in Africa, the Middle East, and Asia.

The Kremlin’s spokesperson, Dmitry Peskov, announced Russia’s decision to put the agreement on hold until its demands to export its own food and fertilizer are met. Despite Russia’s complaints of shipping and insurance restrictions impeding its agricultural exports, it has managed to export a record amount of wheat since last year.

The suspension signifies the termination of a pact brokered by the U.N. and Turkey last summer, devised to ease the global food crisis exacerbated by Russia’s invasion of Ukraine. Both Ukraine and Russia are significant providers of wheat, barley, sunflower oil, and other affordable food commodities that developing countries depend on.

The discontinuation of the deal led to a 3% rise in wheat prices in Chicago trading but fell later in the day. The agreement guaranteed the safety of ships entering and exiting Ukrainian ports and facilitated the movement of Russian food and fertilizer.

Ukrainian President Volodymyr Zelenskyy expressed his desire to keep the initiative active even in the absence of Russia’s safety assurances, while Turkish President Recep Tayyip Erdogan remained hopeful for the deal’s extension.

Since the implementation of the Black Sea Grain Initiative, Ukrainian ports have exported 32.9 million metric tons of grain and other food. However, Russia has been vocal about its perception that the deal predominantly benefits wealthier nations.

The war in Ukraine, coupled with other conflicts, the lingering impacts of the COVID-19 pandemic, droughts, and other climate-related issues have catapulted food commodity prices to record levels and fuelled a global food crisis. Rising food costs have disproportionately impacted people in developing countries, pushing millions more into poverty or food insecurity.

Shashwat Saraf, the International Rescue Committee’s regional emergency director for East Africa, warned that the end of the initiative could create “instability and uncertainty” in global food markets, potentially elevating prices and aggravating food insecurity in vulnerable nations already affected by climate change.

The U.N. Food and Agriculture Organization revealed that 45 countries currently require external food assistance due to high local food prices driving worrying levels of hunger.

Simon Evenett, professor of international trade and economic development at the University of St. Gallen in Switzerland, cautioned that Russia, as the world’s largest wheat supplier, might increase its export taxes. Such a move would cause global grain prices to rise and provide Russia with additional funding for its military campaign in Ukraine.

Since its inception, the grain deal has experienced several challenges. Russia briefly withdrew from the agreement in November before rejoining and extending the deal. Ukraine has also accused Russia of preventing new ships from participating in the initiative since the end of June.

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• Ukraine’s position on grain export