Western leaders have accused President Vladimir Putin of weaponizing food after Russia withdrew from an agreement that allowed grain to be shipped from ports in Ukraine – a move that experts say will push up global food prices with “catastrophic consequences” for poor countries already facing famine.
Moscow pulled out of the United Nations-backed deal on Saturday, once again cutting Ukraine’s sea-borne exports off from world markets.
Kremlin officials said they were responding to a drone strike earlier that day against Russian naval vessels near the port of Sevastopol in Russian-annexed Crimea. Ukrainian Foreign Minister Dmytro Kuleba called this a “false pretext” to shut down grain shipments.
Ukraine is one of the world’s largest grain producers. The Black Sea Grain Initiative, announced in July, temporarily ended a blockade of three Ukrainian ports, allowing the export of more than nine million tonnes of wheat, corn, barley and other foodstuffs in recent months.
The aim of the initiative – a rare diplomatic success during the war – was to bring down global food prices, which had soared after Russia’s invasion of Ukraine, and alleviate food shortages that were leading to widespread hunger in developing countries.
Traders and economists now expect agricultural commodity prices to jump again. That could hit Canadians at the grocery store, adding to broader inflationary pressures. Meanwhile, aid agencies are warning of increased food shortages, particularly in East Africa and countries such as Yemen that rely on Russian and Ukrainian wheat imports.
“The UN-brokered deal brought a ray of hope – now this hope is shattered again – the recent suspension of grain exports will hit those on the brink of starvation the most,” Shashwat Saraf, East Africa emergency director for the International Rescue Committee, said in a statement on Sunday.
Ukraine’s infrastructure ministry said Sunday that Russia’s decision had “effectively blocked” 218 vessels from moving goods from Ukrainian ports. Ninety-five loaded vessels had left port and were awaiting inspection; 101 empty vessels were awaiting inspection on the way into port; and a further 22 ships were loaded with agricultural goods and waiting to leave.
This included a ship carrying 40,000 tonnes of grain bound for Ethiopia as part of a program administered by the UN World Food Programme, Ukraine’s Infrastructure Minister Oleksandr Kubrakov said on Twitter on Sunday.
“Putin’s decision to suspend participation in the Black Sea Grain Initiative will have devastating effects on millions around the world,” Global Affairs Canada said on Twitter on Sunday. “Many will go hungry. We call on Russia to reverse this decision and stop weaponizing hunger. Ukrainian grain must stay on international markets.”
The agreement was scheduled to expire on Nov. 19 and Russia had been critical of the arrangement in recent weeks, already raising doubts about the future of the deal. Russian officials have questioned how much Ukrainian grain was actually going to poor countries, and complained that Western banks, insurers and shipping companies were reluctant to facilitate Russian grain and fertilizer exports, despite sanctions relief contained in the deal.
UN officials had been working to broker an extension. Now, UN Secretary-General Antonio Guterres has delayed a visit to Algeria to focus on reviving the agreement.
“The Secretary-General continues to engage in intense contacts aiming at the end of the Russian suspension of its participation in the Black Sea Grain Initiative,” UN spokesperson Stéphane Dujarric said.
“The same engagement also aims at the renewal and full implementation of the initiative to facilitate exports of food and fertilizer from Ukraine, as well as removing the remaining obstacles to the exports of Russian food and fertilizer.”
Western leaders widely condemned Russia’s decision. U.S. President Joe Biden called the move “purely outrageous,” and said that it is going to increase starvation.
Josep Borrell, the European Union’s top foreign affairs official, said on Twitter that the move “puts at risk the main export route of much needed grain and fertilizers to address the global food crisis caused by its war against Ukraine.”
Commodity analysts are warning of big price jumps on Monday morning, when wheat futures contracts start trading.
“Russia’s announcement is certainly bullish for prices and the start of the week is very likely to see prices climb, simply because less grain is going to come out of Ukraine,” said Arthur Portier of consultancy Agritel.
Russia’s move adds to other supply concerns, including drought in Argentina and torrential rain in Eastern Australia. “The problem is that among other major exporting countries, wheat supply is waning,” Mr. Portier said.
Another surge in global grain prices could add to inflation in Canada. While overall Consumer Price Index inflation has fallen in recent months, food inflation remains at a multidecade high. Grocery prices were up 11.4 per cent year over year in September – the biggest surge since 1981. The price of bakery products were up 14.8 per cent year over year.
“Contributing to price increases for food and beverages were unfavourable weather, higher prices for important inputs such as fertilizer and natural gas, as well as geopolitical instability stemming from Russia’s invasion of Ukraine,” Statistics Canada said earlier this month.
With reports from Reuters