Nikhil Kumar
The world couldn’t have been hungrier for it — in the most literal of ways. Which is why when the United Nations Secretary-General António Guterres unveiled a deal last week to restart Ukrainian grain exports, he was almost unrelentingly effusive, calling the agreement a “beacon on the Black Sea.” It was, he said, “a beacon of hope … a beacon of possibility, a beacon of relief … in a world that needs it more than ever.” A first sign that the deal was holding came Wednesday, as Ukraine said work had begun at three key southern ports to open “corridors” for grain exports. Odessa military administration spokesman Serhiy Bratchuk said naval teams were working at ports in Odessa, Chornomorsk and Pivdennyi to open routes for grain to be carried in “caravans” of ships through the Black Sea.
Implemented successfully, the Russia-Ukraine grain pact could bring down prices for basic food staples and help plug food shortfalls in countries that are heavily dependent on Ukrainian supplies. Even as the war continues, a freeing up of these shipments — some 20 million tons have been stranded by the war and a Russian blockade — could help ease a global food crisis that has been fanned by Moscow’s invasion.
As Grid has previously reported, Ukraine and Russia are central to the world’s food supply. Before the war, Ukraine alone supplied some 45 million tons of grain to the world market, while Russia is the world’s leading fertilizer exporter. The war interrupted Ukrainian exports; those 20 million tons of grain are the product of last year’s harvest held hostage, as Russia blocks critical freight routes in the Black Sea, and as the Ukrainians mine sea lanes to keep out Russian ships. Sanctions on Russia, meanwhile, have hit other grain supplies, as well as the global supply of fertilizers, impacting farming in places as far away as Peru and Indonesia.
The results: higher prices for all, less food for many.
While the world watches to see whether the grain deal itself will be implemented, the agreement struck in Istanbul raises questions about what else might be done to ease the broader crisis. Beyond freeing the grain stuck in Ukrainian ports, what policies or actions would make a difference?
What 20 million tons of grain can do
The release of all that grain would have two major positive impacts: providing more food for Ukraine’s long-standing customers — and bringing down prices of basic staples by adding supply.
The grain stuck in Ukraine is particularly important for nearby countries that have depended for years on the food supply chain that begins in those Black Sea ports. Egypt, for instance, is still waiting for deliveries of around 300,000 tons of Ukrainian wheat that were meant to land on its shores in February and March. Other countries in the Middle East and Africa have been facing shortfalls — among them Lebanon, which before the war relied on Ukraine for some 60 percent of its wheat imports. In Africa, some of the continent’s poorest countries — Somalia in particular — have been badly affected by the loss of Ukrainian grain. Already struggling for years to feed itself, Somalia relied on Ukraine for more than half its wheat imports before the war.
This is what the deal struck in Istanbul is supposed to fix: By releasing the grain, the hope is that these and other short-term shortages can be relieved.
Meanwhile, allowing Russia to resume fertilizer exports isn’t just a sop to Moscow: It will also help farmers around the world, in countries as far away as Peru, which last year relied on Russia for 70 percent of its fertilizer supplies.
“If it is implemented, the agreement will certainly help ease grain shortages, particularly for countries in the Middle East and Africa that rely heavily on grain imports from Russia and Ukraine,” Tjada D’Oyen McKenna, chief executive of the humanitarian group Mercy Corps, told Grid. It was imperative, she added, that “the 20 million tons of grain stuck in Ukraine reach the most import-reliant countries that have seen the biggest impact of these shortages.”
As far as global prices are concerned, the news of the deal — and the mere prospect of the grain’s release — triggered a drop in global wheat prices, as traders factored in the arrival of Ukrainian grain on the world market. If the blockade were to end, and those 20 million tons actually left Ukrainian ports, the hope is that prices will settle at a lower level — helping broaden access to food for millions of people.
As Guterres put it last week, lower prices are a key aim of the deal. They would, he said, bring “relief for developing countries on the edge of bankruptcy and the most vulnerable people on the edge of famine.”
The markets were also looking beyond Ukraine to an uptick in Russian exports: The deal will facilitate Russia grain shipments, a big part of the global food supply chain. Last year alone, Moscow earned $11 billon from grain exports.
In addition to countries that await all that stranded grain, there are international aid organizations waiting as well. The U.N. World Food Programme (WFP) depends heavily on food staples from Ukraine and Russia; as Ertharin Cousin, the agency’s former executive director, recently told Grid, the organization sources about half the wheat it distributes in poor and conflict-ridden countries from Ukraine. The war, she explained, thus “increases the cost of each operation and reduces the number of people they are able to feed.”
If the grain stuck in the conflict zone starts to flow to hungry customers, those costs will come down as well — helping the WFP and by extension, the world’s poorest people access much needed nutrition.
What else can be done?
Solving the 20-million-ton grain problem — and there remain serious questions as to whether it can be resolved — won’t be enough by itself. As Grid has reported, the current food supply crisis predates the war; in 2021, around 828 million people were affected by hunger — an increase of 46 million from the year before and 150 million higher than in 2019.
Longer term, solving this crisis requires action on issues ranging from the impact of climate change on farming to the economic fallout of covid-19, which robbed millions around the world of their livelihoods.
And in the short term, while the shipment of Ukrainian grain will help, ultimately the war needs to end — or at least see a reduction in the level of hostilities — to ensure that there aren’t further problems down the road. A key focus here is the next harvest in Ukraine.
As Grid has reported, the most recent crop-planting season in Ukraine unfolded in the shadow of war. That resulted in a significant reduction — about 20 to 30 percent — in the level of spring crops that could be sown in the country, according to U.N. estimates.
With the war continuing, it is not yet clear how much of that reduced crop will be harvested in the coming months. The government in Kyiv has taken steps to ensure that farm work can continue — among other measures, it has exempted agricultural workers from military service.
But in some parts of the country, there are concerns as to whether farmworkers will be able to access their fields. One local estimate suggests that of the 7.6 million hectares of land planted with winter wheat, rye and barley in recent months, only about 5.5 million hectares will be accessible for harvesting.
In addition to concerns about safety, there is the war’s powerful economic impact. Transport costs, for example, have skyrocketed, making it harder for Ukrainian farmers to move what crop they can harvest via land routes to silos or nearby ports.
“Most of the farmers are running the risk of becoming bankrupt very soon,” Mykola Horbachov, the head of the Ukrainian Grain Association, an industry group, told the Associated Press earlier this month.
The upshot: Even if the grain deal frees up last year’s harvest, big questions remain about the future of Ukraine’s agricultural sector. The country’s agricultural minister warned recently that the fallout could result in Ukrainian farmers planting up to two-thirds less wheat later this year. “Farmers will reduce winter sowing [of] wheat and barley from 30 to 60 percent,” Mykola Solskyi told the Financial Times in a recent interview.
What could other countries do?
Beyond whatever Ukraine and Russia do that extends or alleviates the global food crisis, experts say that other countries have it in their power to help. This would require nations to look beyond their narrow domestic needs and dial back policies that have only made things worse.
As food supplies have waned and prices spiked, several food-producing countries have responded by restricting or even banning the export of food staples and fertilizers. The motivation behind the curbs is clear enough: Governments are trying to ensure they have enough food to go around at home at a time when much of the world is being hammered by high rates of inflation. As Grid has previously reported, rising prices have already fanned unrest globally.
World Bank data shows that, as of early June, 34 countries had recently imposed export restrictions on food and fertilizers. “These actions are self-defeating because they reduce global supply, driving food prices even higher,” the bank’s analysts warn. “Other countries respond by imposing restrictions of their own, fueling an escalating cycle of trade actions that have a multiplier effect on prices.”
Among the countries that have imposed curbs is Russia, one of the world’s largest wheat exporters, which announced a temporary export ban covering wheat and other grains in March. India, which has benefited recently from a record wheat harvest, banned wheat exports in May. 22 other countries have introduced restrictions on wheat exports. That affects around 21 percent of the global trade in the key staple. And that, in turn — you guessed it — drives up prices.
Experts say it’s a short-sighted policy that will cause long-term pain. The solution, they say, is to do the opposite: take down export controls, and allow food and fertilizer to flow more easily on the global markets. That extra supply would help bring down prices. “Avoiding stockpiling and encouraging free movement of food is important to keep markets functioning and avoiding inflationary pressure,” McKenna told Grid.
Indeed, recent history shows how export restrictions can drive up global prices. Economic uncertainty and global food price spikes in 2008 triggered a series of similar curbs, with 36 countries moving to impose restrictions on exports of food, as well as fertilizers. Analyzing the data, economists now say that in the absence of those limits, prices would have been 13 percent lower.
It’s why the heads of several international organizations — the World Bank, International Monetary Fund, World Food Programme and others — joined together this month to call on governments to scrap such restrictions.
The hungry get hungrier
The problem with all these ideas and suggestions is that their chances of implementation appear low at the moment. Even the much-vaunted Ukraine-Russia grain deal is at risk — not only because the Russians launched missiles at the port of Odessa in Ukraine, one day after the agreement was signed, but also because the details of enforcement are complex and might be undone by action on the front lines.
A critical worry for many global experts is that in a time of food shortages, available supplies will end up in the hands of those with money and influence — that is, away from poorer countries that are already struggling.
“Amid intense competition for food and key inputs like fertilizer, there is a risk that supplies may be diverted away from poorer countries to richer ones, repeating the experience for covid-19 vaccines,” the head of the World Trade Organization, Ngozi Okonjo-Iweala, said at a recent G-20 meeting.
The result could be another global health catastrophe — this time driven not by a new disease but by hunger. As Peter Sands, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria told the Agence France-Presse news agency last month, in the wake of the pandemic, the twin traumas of global energy prices and global food shortages mean that “we’ve probably already begun our next health crisis.”
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