Expert analysis reveals reasons behind Russia’s withdrawal from the Ukraine grail agreement

**The Importance of Ukrainian Grain in the Global Food Supply Chain**
Ukraine’s Role as the Breadbasket of Europe

Ukraine plays a crucial role in the global food supply chain, as it has long been known as the breadbasket of Europe. The country is a major supplier of wheat, barley, sunflower products, and corn not only to Europe but also to developing countries like those in the Middle East, Northern Africa, and China. Before Russia’s invasion in 2022, over 400 million people relied on foodstuffs from Ukraine.

The Richness of Ukrainian Soil

One of the key reasons for Ukraine’s importance in the global food supply chain is its fertile soil. Ukraine boasts approximately one-third of the world’s most fertile soil, known as chernozem or black soil. This fertile soil enables Ukraine to produce high-quality agricultural products to meet the demands of the global market.

The Accessibility of Ukrainian Ports

Ukraine’s year-round access to ice-free harbors in the Black Sea has been crucial in facilitating the shipment of grains to nearby markets in the Middle East and Africa. These ports have played a vital role in ensuring the smooth flow of Ukrainian agricultural exports and have contributed significantly to Ukraine’s position in the global food supply chain.

The Impact of the War in Ukraine

The outbreak of the war in Ukraine has had severe consequences for the global food supply chain. Even before the war, global famine was on the rise. However, Russia’s invasion exacerbated the situation. According to the United Nations, from 2019 to 2022, more than 122 million people were driven into hunger due to a combination of climate change, the COVID-19 pandemic, and the war in Ukraine. Global hunger levels are now at their highest since the early 2000s.

The Effect of the Naval Blockade

Russia’s naval blockade imposed on Ukraine caused further disruptions to the global food supply chain. From February to June 2022, approximately 25 million tons of Ukrainian grain intended for global markets were trapped in Ukraine. This blockade led to a significant increase in food prices worldwide.

The Black Sea Grain Deal

To address the challenges faced by the global food supply chain, the United Nations and Turkey brokered the Black Sea Grain Deal with Ukraine and Russia in July 2022. The agreement aimed to secure the passage of agricultural products from Ukraine through three ports on the Black Sea, including the largest port, Odesa. Initially intended to last for 120 days, the agreement has been extended several times since then.

Positive Impact of the Grain Deal

Since the implementation of the grain deal, Ukraine has exported more than 32 million tons of food products through the Black Sea. The World Food Program, the largest humanitarian agency globally, has purchased 80% of its wheat from Ukraine. Humanitarian shipments to Ethiopia, Yemen, Afghanistan, and Turkey have significantly benefitted from the grain deal. The United Nations estimates that the deal has reduced food prices by more than 23% since March 2022.

Challenges and Falling Production

Despite the grain deal’s positive impact, there are still challenges affecting Ukrainian grain exports. The number of grain shipments per month has been decreasing, primarily due to slowdowns in Russian inspections before ships are allowed to exit the Black Sea. Furthermore, falling production is a significant concern. Before the war, Ukraine was expected to produce 31% more wheat, barley, corn, and other crops than it does now. Additionally, the destruction of a key Ukrainian dam has flooded fields, further impacting production.

The Importance of the Black Sea for Ukrainian Exports

Research conducted by colleagues at UMass Amherst and the Kyiv School of Economics highlights the vital role of the Black Sea ports in ensuring the smooth export of Ukrainian grain worldwide. Before the war, 90% of Ukraine’s agricultural exports were transported via the Black Sea. Although Ukraine also utilizes land transportation through Europe, it is more costly and time-consuming compared to sea exports. The war has led to additional challenges for land transportation, including mines, the destruction of infrastructure, and rising costs.

Russia’s Threat to Exit the Deal

Russia has threatened to exit the grain deal in the past but ultimately chose to remain. However, in July 2023, Russia declared its unwillingness to stay in the deal unless its demands were met. It also launched a significant attack on the port of Odesa, which severely impacted the price of critical commodities like wheat and corn. Russia’s threats and actions have caused great uncertainty and global concern about hunger.

The Potential Consequences

The current situation is uncertain, as Russia’s strikes have caused extensive damage to Odesa, potentially limiting Ukraine’s future export capabilities through the port. It is crucial to prioritize goodwill and find a resolution that allows Ukraine to continue its vital grain exports.

In Conclusion,

Ukraine’s role in the global food supply chain is of utmost importance. The country’s rich soil, accessible ports, and historical contributions as a major supplier make it a crucial player. However, the war and Russia’s actions have significantly disrupted the supply chain and exacerbated global hunger issues. Efforts such as the Black Sea Grain Deal have provided temporary relief, but challenges remain. It is essential to work towards long-term solutions that prioritize the well-being of people worldwide and ensure the continued flow of Ukrainian grain to those in need.