Russia’s withdrawal from the grain export deal in mid-July has raised alarm over its effect on global food security, particularly in countries that are heavily reliant on Ukrainian imports.
The announcement by Russia that it would not renew the agreement sent wheat prices soaring on global markets, raising concerns about the consequences on poorer, wheat-importing nations. US wheat and corn futures in Chicago had their largest gains on 19 July since the beginning of the Ukraine war.
Under the deal, which was brokered by Turkey and the United Nations in July 2023, a Russian blockade of Ukraine’s Black Sea ports was lifted, allowing millions of tons of grains to be exported to global markets via Turkey’s Bosphorus Strait.
Russia’s pull-out from the deal means it has paused its involvement in inspections of vessels conducted by Russian, Ukrainian, and Turkish officials and has stopped scheduling the arrival of new ships at Ukrainian ports.
“Approximatively one-third of the grain moved through the Black Sea Grain Initiative went to MENA countries”
The Kremlin has cited concerns that the part of the deal that pertains to its own foodstuffs has not been implemented and that Western sanctions are indirectly hurting exports.
“As soon as the Russian part is completed, the Russian side will return to the implementation of this deal immediately,” said Kremlin spokesperson Dmitry Peskov when Russia announced it would not extend the deal, previously prolonged for only two months.
Among Russian demands are the readmission of the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT payment system, the resumption of exports of agricultural machinery and spare parts to Russia, and the removal of restrictions on insurance and access to ports for Russian ships and cargo. RELATED
Black Sea grain: Is Russia weaponising global food security?
Analysis James Snell
Western countries have accused the Kremlin of weaponising hunger. Ukraine’s Foreign Minister Dmytro Kuleba said Russia has been “slowly killing the grain initiative, from one extension to another”.
Figures from the UN’s Joint Coordination Centre show that exports from Ukraine have been decreasing in recent months, and were at their lowest in May and June since the deal was implemented. Ukraine has criticised Russia for delaying inspections and repeatedly threatening to pull out of the deal. With some fields now in Russian-occupied areas, Ukrainian production has decreased by 35-40 percent since the war began.
On the other hand, according to the US Department of Agriculture (USDA), Russia’s wheat exports are projected to reach an all-time high in 2022-23. But Russia also had a record harvest last summer, and its wheat stocks are currently the highest they have been in 30 years.
Root causes of the food crisis in the MENA region
Wheat is the main staple food in the Middle East and North Africa, and with many countries already suffering from high public debt, dangerous levels of inflation, and currency devaluation, the collapse of the deal and any further rise in food prices threaten a region that is heavily dependent on food imports.
“Approximatively one-third of the grain moved through the Black Sea Grain Initiative went to MENA countries,” Louis Dugit-Gros, a diplomat and visiting fellow at the Washington Institute, told The New Arab.
“The main beneficiaries were Turkey, Egypt, Libya, Israel, Tunisia, Algeria, and Iran but also countries suffering from humanitarian crises such as Lebanon and Yemen.”
Four out of fifteen countries on the World Food Programme’s ‘currency watch list‘ are in the Middle East. Lebanon, Egypt, Syria, and Iran saw their currencies depreciate between 45 and 71 percent in the year leading to March 2023, with Lebanon and Syria facing triple-digit food inflation.
“Food insecurity has been on the rise over the last decade across the MENA region, where UN agencies estimate that over 50 million people are struggling to find their next meal”
Food production in the region has been endangered by conflict as well as the climate crisis, with countries like Morocco and Algeria struggling with drought. According to the WFP, the number of food-insecure people across the region has increased by 20 percent in the last three years.
“Pre-deal, a number of MENA countries were already particularly vulnerable. High grain prices were straining the budgets of countries where those prices are subsidised,” Dugit-Gros said. “The collapse of the deal will add to these tensions by causing both supply difficulties and high prices.”
Egypt, for one, condemned Russia’s exit from the deal. The country, which is projected to be the world’s top wheat importer in 2023-24, is extremely vulnerable to fluctuations in food prices and heavily subsidises bread. Egyptian President Abdel Fattah el-Sisi is due to attend the Russia-Africa summit in St. Petersburg on the 27 and 28 July.
According to data from the UN’s Joint Coordination Centre, since its implementation, the grain deal has allowed nearly 33 million metric tons of foodstuffs to be exported from Ukraine. RELATED
The Middle East’s deepening food crisis
In-depth Paul Iddon
The World Food Programme (WFP) has also shipped more than 725,000 tons of wheat from Black Sea ports to support its humanitarian operations worldwide, including in places such as Afghanistan, Ethiopia, Sudan, and Yemen. As of July 2023, 80 percent of the WFP’s grain stock came from Ukraine, up from 50 percent before the war.
Although roughly 60 percent of the grain exported from Ukraine was headed for ports in Europe, its final destinations include Algeria, Morocco, Egypt, Nigeria, and Pakistan.
Russia and Ukraine are the first and fifth largest wheat exporters, respectively accounting for 20 and 10 percent of global exports. Ukraine is also the largest producer of sunflower seed, followed by Russia.
“Food insecurity has been on the rise over the last decade across the MENA region, where UN agencies estimate that over 50 million people are struggling to find their next meal,” Ruth James, MENA Humanitarian Coordinator at Oxfam, told The New Arab.
“This is due to a lethal combination of conflict, poor economic policies, increasingly unequal societies and over-reliance on imports in an increasingly unstable world,” she added. “The recent collapse of the Black Sea Grain Deal will likely exacerbate an already critical situation for millions.”
Avoiding big power games
Russia has given the UN three months to implement the terms of a memorandum to facilitate Russian agricultural exports, which it says have been indirectly hurt by Western sanctions. The Kremlin says that any ship travelling to Ukraine will now be considered a potential threat.
Turkish President Recep Tayyip Erdogan, who expects a visit from President Vladimir Putin in August, has called on the West to consider Russia’s demands.
Meanwhile, amid a Ukrainian counter-offensive, Moscow has been striking Ukrainian ports in the Black Sea and seizing ships in a further escalation of the crisis, which the West has accused Russia of triggering in an attempt to dodge sanctions that are hurting its economy.
Speaking at the UN security council, macroeconomist Mikhail Khazin warned that sanctions against Russia, while not aimed directly at agrifood products, are making grain production unprofitable as operators prefer to avoid dealing with Russian producers. This, according to Khazin, could result in a shortage of grains in global markets in a year or two.
According to some observers, Putin might be speculating on the impact of a further rise in food prices for countries that support Ukraine.
“Russia will aim to build closer alliances with particular regions, and one of the key fields for collaborations will be food security,” Dr Diana Galeeva, an academic visitor at Oxford University, told The New Arab.
“However, this matter also might challenge some relations with regional actors in the MENA,” she added.
“Whether the region will keep bilateral dialogue regarding the matter, which might further boost relations with Russia is highly possible. Nonetheless, there is another possibility that the MENA countries will rely more on regional alliances and dialogue to tackle such non-security threats in order to avoid dependence on these political games between great powers.”
Ylenia Gostoli is a reporter currently based in Istanbul, Turkey. She has covered politics, social change, and conflict across the Middle East and Europe. Her work on refugees, migration and human trafficking has won awards and grants
