Ukraine grain deal signed: Why it matters
Ukraine, Russia, Turkey and the UN signed a much-anticipated deal on Friday that paves the way for the resumption of Ukrainian grain shipments from Black Sea ports.
What deal has been reached?
While not all details of the agreement have been revealed, shipments from Ukrainian ports will begin in full in a couple of weeks, according to the UN. The ports will reportedly not be fully demined and the Ukrainian Navy and Coast Guard captains will be allowed to escort ships avoiding mined waters. Officials from Russia and other countries are expected to inspect the shipments to ensure no weapons are smuggled.
Why is the deal important?
Restarting grain shipments from Ukraine, the world's fifth largest producer, will help secure global food supplies and stem rising concerns about food security.
Why is the grain not leaving Ukraine?Due to the conflict with Russia. Most exports are shipped via the Black Sea ports, which have been blocked due to the hostilities, while foreign shippers are afraid to go near the conflict zone.
- Who is responsible?
Ukraine and the West blame Russia, whose navy dominates the Black Sea, for blocking Ukrainian ports. However, Moscow says Ukrainian forces have mined the country’s remaining port in Odesa to protect the city from a Russian attack. Moscow has offered to ship the grain from Russian ports in the Azov and Black Seas.
- What has been done to retrieve the grain?
The EU recently established so-called “solidarity lanes,” which incorporate a network of trucks, trains and other vessels that facilitate exports from Ukraine. However, land-based shipments cannot be as large as those by sea. Talks to resume grain shipments via the Black Sea have been ongoing for several weeks. The primary issues at stake are that the port in Odesa needs to be demined in order to create a safe transport corridor, while Ukraine is seeking security guarantees if it does remove the mines. Turkey has stepped in to ensure the security of shippers that seek to pick up Ukrainian cargo.
- How important is Ukraine for global grain supplies?
Last year, Ukrainian suppliers accounted for 10% of global grain exports. These volumes are crucial for developing countries. According to Kiev, however, the country’s grain deliveries dropped 55% year-on-year, to 777,000 tons, in June alone. The UN Food and Agriculture Organization (FAO) estimates there are at least 20 million tons of grain currently stuck in Ukraine. If these shipments don’t reach their destinations, the FAO says at least 18 million people worldwide would face food shortages.
- Which countries are most affected by the drop in Ukrainian exports?
According to the World Trade Organization (WTO), food imports from the Black Sea region are crucial for the wellbeing of 35 African countries, which receive 90% of the grain they need from the area. Countries of the Middle East are also among Ukraine’s major importers. In 2020, most of Ukraine’s grain went to Egypt, Indonesia, Pakistan, Bangladesh and Lebanon.
- Why are there concerns about global food insecurity?
As a result of the conflict in Ukraine and subsequent sanctions against Russia, which have limited the two countries’ agricultural exports, global grain prices began to rise. In response, other major growers, such as India and Kazakhstan, were forced to halt grain exports altogether to bring domestic prices under control. As a consequence, many grain-importing nations are facing rising food prices and shortages.