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Ukraine grain deal: What has happened to food prices since it ended? Ukraine grain deal: What has happened to food prices since it ended?
(about 2 months later)
A grain ship in the port of Chornomorsk on Ukraine's Black Sea coastA grain ship in the port of Chornomorsk on Ukraine's Black Sea coast
Wheat prices around the world have soared after Russia's refusal to renew its grain deal with Ukraine. Turkish president Recep Tayyip Erdogan says he is confident that Russia will restart a deal which let Ukraine export its grain through the Black Sea.
The arrangement allowed ships to sail through the Black Sea to export millions of tonnes of grain to the rest of the world. However President Putin, who pulled out of the scheme in July, wants compromises from the West before he will rejoin.
What was the grain deal?What was the grain deal?
When Russia invaded Ukraine in February 2022, its navy blockaded the country's Black Sea ports, trapping 20 million tonnes of grain which were meant for export. Ukraine is one of world's biggest suppliers of crops such as sunflower oil, barley, maize and wheat.
When Russia invaded in February 2022, its navy blockaded the country's Black Sea ports, trapping 20 million tonnes of grain which were meant for export.
This caused world food prices to soar, and threatened to create shortages in Middle Eastern and African countries which imported significant amounts of food from Ukraine.This caused world food prices to soar, and threatened to create shortages in Middle Eastern and African countries which imported significant amounts of food from Ukraine.
In July 2022, a deal was struck between Russia and Ukraine - brokered by Turkey and the UN - allowing cargo ships to sail along a corridor in the Black Sea 310 nautical miles long and three nautical miles wide. In July 2022, a deal was struck between Russia and Ukraine - brokered by Turkey and the UN - allowing cargo ships to sail along a corridor in the Black Sea.
The corridor ran to and from the Ukrainian ports of Odesa, Chornomorsk and Yuzhny/Pivdennyi. The corridor, which was 310 nautical miles long and three nautical miles wide, ran to and from the Ukrainian ports of Odesa, Chornomorsk and Yuzhny/Pivdennyi.
It also allowed the Russian navy to check ships for weapons at the Bosphorus Strait, at the entrance to the Black Sea.It also allowed the Russian navy to check ships for weapons at the Bosphorus Strait, at the entrance to the Black Sea.
Almost 33 million tonnes of grain were shipped from Ukraine under the deal, and world food prices declined by roughly 20% as a result, according to the UN's Food and Agriculture Organization.Almost 33 million tonnes of grain were shipped from Ukraine under the deal, and world food prices declined by roughly 20% as a result, according to the UN's Food and Agriculture Organization.
However, since Russia pulled out of the deal, world grain prices have risen again, according to the UN's food price index.
Where did Ukraine's grain go?Where did Ukraine's grain go?
According to the UN's Joint Coordination Centre, 57% of the foodstuffs exported from Ukraine over the past year went to developing countries and 43% to developed countries. According to the UN's Joint Coordination Centre, 57% of the foodstuffs exported from Ukraine under the deal went to developing countries, and 43% to developed countries.
The biggest recipients were China, Spain, Turkey and Italy.The biggest recipients were China, Spain, Turkey and Italy.
Russia cited Ukraine's failure to export more grain to poorer countries as one of the reasons it pulled out of the deal.Russia cited Ukraine's failure to export more grain to poorer countries as one of the reasons it pulled out of the deal.
However, the UN says that Ukraine has supplied 725,000 tonnes of grain to the World Food Programme (WFP), which was sent as humanitarian aid to Afghanistan, Djibouti, Ethiopia, Kenya, Somalia, Sudan and Yemen.However, the UN says that Ukraine has supplied 725,000 tonnes of grain to the World Food Programme (WFP), which was sent as humanitarian aid to Afghanistan, Djibouti, Ethiopia, Kenya, Somalia, Sudan and Yemen.
The EU says that over the past year, Ukraine supplied the WFP with more than 80% of all its grain, compared to 50% before the war. The EU said that while the deal was in place, Ukraine supplied the WFP with more than 80% of all its grain, compared to 50% before the war.
The US ambassador to the UN, Linda Thomas-Greenfield, called Russia's cancellation of the grain deal an "act of cruelty".The US ambassador to the UN, Linda Thomas-Greenfield, called Russia's cancellation of the grain deal an "act of cruelty".
It is estimated that more than 50 million people across Somalia, Kenya, Ethiopia and South Sudan are currently in need of food aid because of successive years of failed rains.It is estimated that more than 50 million people across Somalia, Kenya, Ethiopia and South Sudan are currently in need of food aid because of successive years of failed rains.
Russia's grain deal exit stab in the back - KenyaRussia's grain deal exit stab in the back - Kenya
What has happened to food prices since the grain deal ended? What has happened to since the grain deal ended?
The grain deal expired on 17 July.The grain deal expired on 17 July.
Since then, Russia has launched a series of air attacks on Ukraine's ports, destroying an estimated 60,000 tonnes of grain. Since then, Russia has launched a series of air attacks on Ukraine's ports, destroying thousands of tonnes of grain.
Watch: Footage shows the impact of attack on Odesa grain terminalsWatch: Footage shows the impact of attack on Odesa grain terminals
Watch: Footage shows the impact of attack on Odesa grain terminalsWatch: Footage shows the impact of attack on Odesa grain terminals
The Russian defence ministry also said it would regard all cargo ships in the Black Sea bound for Ukraine as potential military targets. The Russian defence ministry also said it would regard all cargo ships in the Black Sea bound for Ukraine as potential military targets, and this has deterred grain ships from going to Ukraine's ports.
Ukraine is one of world's biggest suppliers of crops such as sunflower oil, barley, maize and wheat. As one of the architects of the grain deal, the Turkish president met President Putin in the Russian Black Sea resort of Sochi to try and persuade him to revive it.
The ending of the deal has already had a severe effect on international food markets, with wheat prices rising sharply on both European and US wholesale markets. Afterwards President Erdogan said he was confident it could be restarted soon.
However, President Putin said that would only happen if Western nations relaxed sanctions on Russian exports.
Why did Russia refuse to renew the grain deal?Why did Russia refuse to renew the grain deal?
When the UN brokered the deal, it told Russia it would help it increase its exports of grain and fertilisers. When the UN brokered the deal, it told Russia it would help to increase the country's exports of grain and fertilisers.
Although Western countries have imposed no sanctions on Russia's agricultural products, Russia says the broader restrictions which are in place have deterred shipping firms, international banks and insurers from dealing with its producers. Although Western countries have not imposed specific sanctions on Russia's agricultural products, Moscow says the broader restrictions which are in place have deterred shipping firms, international banks and insurers from dealing with its producers.
Russia asked for its state-owned agricultural bank, Rosselkhozbank, to be reconnected to the Swift fast payment system (from which all Russian banks were barred in June 2022).Russia asked for its state-owned agricultural bank, Rosselkhozbank, to be reconnected to the Swift fast payment system (from which all Russian banks were barred in June 2022).
The UN suggested that Russia set up a subsidiary of the bank, which would be allowed to use Swift - but Russia rejected the plan.The UN suggested that Russia set up a subsidiary of the bank, which would be allowed to use Swift - but Russia rejected the plan.
Other proposed schemes, such as processing payments for food and fertiliser through the US bank JPMorgan Chase, or through the African Export-Import Bank, also fell through.Other proposed schemes, such as processing payments for food and fertiliser through the US bank JPMorgan Chase, or through the African Export-Import Bank, also fell through.
Russia says it will rejoin the deal if its conditions are met.Russia says it will rejoin the deal if its conditions are met.
Can Ukraine export its grain another way? How is Ukraine exporting its grain now?
The Ukrainian Grain Association has a plan to export grain through Europe, via its Danube River ports. According to UKrAgroConsult, which works with Ukrainian grain producers, wheat exports have remained quite high since the deal ended, but exports of maize have fallen significantly.
However, less grain could be exported this way, and it would be cost more and take longer. The UK's Agriculture and Horticulture Development Board (AHDB) says 65% of Ukraine's grain exports are now going from the ports of Izmail and Reni, on the Danube. The grain is then transported by river and canals into the Black Sea, via the Romanian seaports of Sulina and Constanta.
The EU drew up a plan in early 2022 for distributing Ukrainian grain if it cannot be shipped through the Black Sea. In January 2023, only 20% of Ukraine's grain was being exported this way.
It said grain could be transported across Ukraine's border with Poland and taken to ports on the Baltic Sea, or to the Romanian port of Constanta. Russia has repeatedly attacked Izmail and Reni with drones to try and disrupt operations.
However, Ukraine's railways have a different gauge to those in the rest of Europe, which means that every trainload of grain has to be transferred from one set of wagons to another at the border. The EU says that since the start of the war, 44m tonnes of Ukraine's grain have been exported by road and rail via neighbouring countries such Romania and Moldova. Currently, 30% of Ukraine's grain is transported on these routes.
In addition, the rail network in Eastern Europe does not have the capacity to transport even the relatively low volumes of grain that Ukraine has previously been exporting by land. However, transporting grain this way is more expensive and time-consuming than doing so by sea.
One problem is that Ukraine's railways have a different gauge to those of EU countries, so every trainload of grain entering the EU has to be physically transferred from one set of wagons to another.
Related TopicsRelated Topics
Russia-Ukraine warRussia-Ukraine war
TurkeyTurkey
FoodFood