Wheat prices rose almost 6% on Monday to $8.77 a bushel, according to the Chicago Board of Trade. This is after Russia indefinitely suspended the Black Sea grain deal with the United Nations that allowed food exports through Ukrainian ports.
What is the Black Sea Grain Initiative?
In July, the United Nations brokered a peace deal that allows Ukrainian grain exports to pass through the Black Sea amid the ongoing war between Russia and Ukraine. The deal also allows for Russian grains and fertilizer to be globally exported.
The agreement was made between the U.N., Ukraine, Turkey and the Russian Federation. The ships transported goods through an agreed upon pathway through the Black Sea and into global waters.
The UN brokered the deal with hopes to “help to stabilize spiraling food prices worldwide and stave off famine, affecting millions,” and reduce global food cost.
According to Gro Intelligence, exports from Russia and Ukraine make up roughly a third of global wheat exports. About 25% of the shipments were being sent to lower income countries, which included food assistance to Yemen and the Horn of Africa, according to the UN.
“In suspending this arrangement, Russia is again weaponizing food in the war it started, directly impacting low and middle-income countries and global food prices, and exacerbating already dire humanitarian crises and food insecurity,” Secretary of State Antony Blinken said in a statement.
Why did Russia pull out of the Black Sea Grain Initiative?
Russia suspended its involvement in the Black Sea Initiative on Saturday, after Russia’s Defense Ministry claimed Ukrainian drones attacked Russian ships in the Black Sea that were protecting the agreed shipping routes, NPR reports.
Ukrainian President Volodymyr Zelenskyy called Russia’s move “rather predictable,” and claimed in a statement, “This is an absolutely transparent intention of Russia to return the threat of large-scale famine to Africa and Asia.”
Impact
Global hunger has drastically increased in the past few years. Food insecurity went from 135 million in 2019 to 345 million in 2022. Roughly 828 million people go to bed hungry, the World Food Programme reports.
The WFP reports that conflict and violence are the largest driving forces for food crises — 60% of hungry areas in the world are impacted by war and violence.
“Civilian cargo ships can never be a military target or held hostage. The food must flow,” Amir Abdulla, a U.N. coordinator for the Black Sea Grain Initiative, tweeted on Monday.
The initiative has moved 9 million tons of grain and reduced food prices around the world, according to Blinken’s statement.
The U.N. is calling upon the involved countries to implement the agreements to their fullest.
“We underline the urgency of doing so to contribute to food security across the world, and to cushion the suffering that this global cost-of-living crisis is inflicting on billions of people,” said the spokesperson for U.N. Secretary-General António Guterres in a statement.