What if Russia blocks Ukraine’s grain deal?

Once labelled by UN Secretary- General Antonio Guterres as a “beacon of hope,” the grain agreement between Ukraine and Russia may be about to collapse. For months, the agreement — also known as the Black Sea Grain Initiative — has been repeatedly extended, but now Russia wants to let it expire in July, which could have global consequences.

Ukraine is one of the world’s largest grain suppliers. Ukrainian grain feeds 400 million people worldwide, according to World Food Program figures. When Russian full-scale invasion of Ukraine began in February 2022, many countries feared a famine. In Africa and the Middle East in particular, a hunger crisis threatened. Food prices had already risen before the start of the Ukraine war, but the Russian invasion made them skyrocket worldwide. In addition, the Russian blockade of the Black Sea meant that millions of tons of grain were stuck in Ukrainian silos, in danger of rotting.

According to the European Union “maintaining Ukrainian grain supplies remains critical to global food security.” If Russia does not agree to extending the deal, it is unclear whether Ukraine will continue to ship the same quantities of grain to the world. The high cost of insuring the ships could be a major problem. Ships that want to cross the Black Sea already have to be insured for thousands of dollars. Shipping companies might be reluctant to send their ships through the war zone if there is no Russian approval.

Transporting grain overland could also become difficult. Since the beginning of the war, Ukraine has exported large quantities of grain via eastern EU countries — but there are too few freight carriages to export all of Ukraine’s grain over land. In addition, farmers in some eastern EU countries resent Ukrainian supplies being shipped through their countries, saying it undercuts local supplies and effectively takes away markets for their own crops.

In reaction, the European Union imposed import restrictions earlier this month that stipulate grain can be transported through Bulgaria, Hungary, Poland, Romania and Slovakia but can not be sold in these countries. The agreement regulates grain exports from the Ukrainian-controlled Black Sea ports of Odesa, Chornomorsk and Pivdenny. Ships must cross the Black Sea along an agreed humanitarian sea corridor towards Istanbul.

Ships en route to and from Ukrainian ports are checked at a Turkish-controlled base by a special team of Russian, Turkish, Ukrainian and UN inspectors. Two UN task forces ensure that Ukrainian grain can be shipped across the Black Sea, and they also facilitate the export of Russian food and fertilizer products. The Black Sea Grain Initiative and EU solidarity corridors to support Ukrainian exports have helped food prices fall and stabilise.

More than 30 million tons of grain and other food products have been exported up to May 2023 thanks to the agreement. Poorer countries in particular have benefited: Around 64% of wheat went to developing countries, while corn was exported almost equally to developed and developing countries. In March though, several media outlets reported that less and less grain was being shipped from Ukraine.

Overall food exports made possible by the agreement fell by about three-quarters in May compared with October last year, as more shipping companies shied away from sending ships on the dangerous route. But strict regulations also make it difficult for ships to pass through quickly.