Problems with Black Sea grain deal lead to drop in global food supply, UN chief says

Food exports plummeted from a peak of 4.2 million tonnes in October 2022 to a mere 1.3 million in May

Commercial vessels, including those that are part of Black Sea grain deal, wait to pass the Bosphorus strait in Turkey. Reuters

UN Secretary General Antonio Guterres on Tuesday expressed frustration over the sluggish pace of inspections and the exclusion of a major Ukrainian port from the Black Sea grain initiative, leading to a drop in the global food supply.

According to UN data, food exports through the maritime humanitarian corridor plummeted from a peak of 4.2 million metric tonnes in October 2022 to a mere 1.3 million metric tonnes in May, marking the lowest volume since the initiative's inception last year.

“This has resulted in a reduction in the movement of vessels coming in and out of Ukrainian seaports, leading to a drop in the supply of essential foodstuffs to global markets,” the UN chief's spokesman Farhan Haq said in a statement.

The deal, first enacted in July 2022 and renewed in increments since, allows grain exports to be shipped from certain Black Sea ports as the Russian invasion of Ukraine continues.

Mr Guterres called on all parties to do their utmost to ensure the continuation of the deal, which has helped to alleviate a crushing food crisis in a number of developing countries.

He reiterated the UN’s full commitment to supporting the implementation of both the Black Sea initiative as well as a separate three-year agreement to support Russian food and fertiliser exports.

The aim of the UN, said Mr Haq, is to enable the safe and predictable transport of food and fertilisers, including ammonia, from Russia and Ukraine to markets worldwide.

“This is especially critical now as the new grain harvest begins in both Ukraine and the Russian Federation,” he said.

Over the past year, Moscow has continuously expressed grievances over western sanctions that have posed financial, logistical and insurance challenges to its shipments.

The Kremlin is requesting the removal of obstacles to its fertiliser exports, such as giving the state-owned Russian Agricultural Bank access to the Swift international payment system.

In addition, Moscow is demanding the resumption of ammonia exports through Ukraine. While there are no western sanctions on Russian food and fertiliser exports, banking restrictions and payment issues have affected exports.

Despite being unable to secure concessions on its demands, Russia has repeatedly extended the grain deal for two-month periods.

However, recent indications suggest that Russia's patience is waning and it may no longer be willing to continue the extension of the initiative.

Russian state news agency RIA quote Moscow's deputy foreign minister as saying on Monday that if the agreement enabling Ukrainian grain shipments via the Black Sea comes to an end, Russia's pact with the UN to enable its own exports will remain effective.

A worker walks on top of a pile of wheat grain in a storage granary at Aranka Malom kft mill in Bicske, Hungary on Tuesday, May 16, 2023. Bloomberg