Russia and Turkey say they have an agreement to restart grain exports via the Ukrainian port city of Odessa. But lifting the blockade of the Black Sea is not enough to alleviate world hunger. “It does not solve the problem of high prices.”
A breakthrough may be on the way for the millions of tonnes of grain trapped in Ukraine because ports in the Black Sea are closed. Two of the key players in the stalemate, Turkey and Russia, have, according to the news agency Bloomberg, entered into a preliminary agreement to open ports.
It is not about the availability of food, but about purchasing power and how the food is distributed.
Ukraine is the fifth largest exporter of wheat in the world and a major exporter of sunflower oil, barley and maize. Since the start of the Russian invasion, exports via the Black Sea, which normally account for 90 percent of Ukrainian exports, have largely stopped. Although exports can also take place by road or rail, it is estimated that due to logistical and administrative stumbling blocks, a maximum of 20 percent of normal exports can take place by that road.
This means that about 20 million tonnes of wheat, maize and barley will not be released from Ukraine for the time being and may become worthless due to rot. The problem threatens to become even more acute when the new crop, which was sown in wartime, is brought in from July. As long as the old stocks are not away from the sheds, they have nowhere to go.
Are the Black Sea ports opening?
Turkey and Russia on Monday reached a preliminary agreement on the export of grain via the Black Sea, according to the news agency Bloomberg. The agreement will initially involve Turkey helping to clear the coastal area near the Ukrainian port city of Odessa. Russia and Ukraine accuse each other of placing floating mines there as a defense strategy.
In addition, Turkey, which controls access to the Black Sea under the Montreux International Treaty, will provide military assistance to escort ships from Odessa. Russian Foreign Minister Sergei Lavrov is due to discuss the plan in Turkey on Wednesday.
It is not known whether Ukraine will also participate, but Kiev is skeptical. “By already communicating about a possible agreement, the Kremlin is trying to shift responsibility for the food crisis to Ukraine,” it said.
International pressure to lift the blockade of the Black Sea has been mounting for weeks. World Food Program (WFP) CEO David Beasley, among others, is begging to open ports. “If we fail to do so, we will declare war on global food security,” he said in late May. “It will lead to famine, destabilization and a worldwide influx of refugees.” Countries such as Finland and Lithuania have already proposed using naval ships and minesweepers to evacuate cargo ships with grain.
The question is whether this grain diplomacy and the reopening of the ports have averted the threat of an announced ‘sultorkan’. It is not so much about the grain caught in Ukraine, which normally ends up in a number of countries from Africa and the Middle East, but about the effect the conflict has on food prices. The latest food index from the United Nations Food and Agriculture Organization (FAO), a basket of staple foods, touched 157.4 points in May, 22.8 percent more than in May last year. The wheat price in April was 56.2 percent higher than last year (see diagrams)†
‘The worldwide production and stocks are large enough to offset the shortage of grain from Ukraine,’ says Bart de Steenhuijsen Piters, researcher in food systems at Wageningen University. ‘It’s not about the availability of food, but about purchasing power and how food is distributed.’
Prices are being pushed up by four major players – Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus, in short ABCD – which control 80 percent of the global grain trade. Nervous about future deliveries from Ukraine and Russia, they start hoarding, pushing up prices. In addition, speculators are active in the food market, artificially raising prices. As a result, some countries can no longer pay for their grain, threatening social unrest. Last week, Chad declared a state of emergency due to a shortage of wheat.
‘A country like Sudan is 80 percent dependent on grain from abroad, especially from Ukraine and Russia,’ says de Steenhuijsen Piters. ‘Ukraine produces on a very large scale, with its own energy and fertilizer, which means that the grain can be sold very cheaply. As a result, it is cheaper for countries from the Middle East and Africa to get their grain there than to produce it themselves. ‘
Opening the ports in the Black Sea does not automatically mean that Sudan gets its grain. “It must first buy it from the big grain companies at current market prices. Sudan can not afford that. The grain is there, but it is too expensive ‘. Open ports are also not very useful for consumers in the slums of Kinshasa or Nairobi. ‘The evacuation will not affect the world market price,’ says de Steenhuijsen Piters. “The price will remain high because we do not know what will happen to the wheat in the near future.”
Expensive food aid
It is particularly worrying that WFP, which provides food aid worldwide in emergencies, is threatened by high food prices. “WFP is now paying 50 percent more per month for its food than in 2019,” said spokesman Jordan Cox. “That’s about $ 56 million a month. As a result, we have to reduce our food distribution in some places, such as Syria. We have to take food from the hungry to feed the dying.”
It happens at a time when more people are starving. In 2019, according to the WFP, 135 million people were “severely food insecure,” meaning they were on the brink of starvation. Due to the pandemic, global warming and escalating military conflicts, this number had already risen to 276 million people by the beginning of 2022. The ripple effect of the war in Ukraine adds another 47 million people, bringing the total number to 323 million, a record high.
Hundreds of thousands of them are at risk of starvation. According to WFP, 750,000 people worldwide suffer from catastrophic hunger, which means that the risk of starvation is a daily reality for them. In addition, 49 million people in 46 countries suffer from severe hunger. Some hunger hotspots are particularly worrying. In a report released Monday, the WFP lists six countries of particular concern. These are Ethiopia, Nigeria, South Sudan, Yemen, Afghanistan and Somalia.
But the food crisis also threatens to disrupt the world more broadly, warns Cox. ‘In the previous food crisis in 2007 and 2008, there were protests and political instability in 48 countries due to the high food prices. Yet the world was much more stable then than it is now. There was still no corona, no war in Syria, climate change was less strong. The situation is now much gloomier, especially with high fuel prices and inflation shooting through the roof. ‘
In addition to additional funding for WFP, short-term solutions do not seem immediately available, although opening the port may reassure the market. ‘It does not solve the problem of high prices,’ says de Steenhuijsen Piters. “They will only fall if producers like the US, Canada, Argentina or Brazil fill the gap, the fertilizer and energy markets calm down and the countries themselves start producing more and more diverse. The world wheat market is now killing the very poor, diversity is the key to reducing this vulnerability. ‘
Russia is trying to buy friends with looted Ukrainian grain
There are growing signs that Russia is trying to sell the grain it stole from Ukraine’s fields to countries in Africa and the Middle East. The Ukrainian embassy in Lebanon said on Friday that it had evidence that Moscow was sending 100,000 tonnes of stolen grain to Syria. This weekend, The New York Times was able to access communications sent by the U.S. State Department to 14 African countries. In it, she urged these countries not to accept stolen grain. Ukraine estimates that Russia has already stolen about 500,000 tons of wheat worth $ 100 million.
So the Kremlin uses food as a geopolitical weapon. On Friday, the President of the African Union, the Senegalese President Macky Sall, met Vladimir Putin for coffee to discuss the food crisis. African countries face a dilemma: They are already in a vulnerable position between great powers like China, Russia and the West, making it difficult to choose sides. At the same time, it is difficult to say no to cheap food, while food prices are hitting record highs and people are at risk of starvation.