ISTANBUL, TURKEY — Alleging a breach by Ukraine of the Black Sea Grain Initiative that established a corridor for ships to move grain to export markets around the world, Russia suspended its participation in the agreement on Oct. 29. Chicago wheat futures were up over 5% in early trading on Monday, Oct. 31.
Specifically, Russia alleged drone attacks on its military fleet in the Black Sea to be a violation of the agreement. Ukrainian authorities denied the allegations.
Negotiators from Turkey and the United Nations said they are working to bring Russia back into the agreement. Despite Russia’s position, ships continued to move in and out of the corridor on Oct. 31, with 12 vessels outbound and 4 inbound, according to the United Nations’ joint coordination center for the initiative.
As of Oct. 30, the total tonnage of grain and foodstuffs moved from the Ukrainian ports under the Initiative totaled 9,521,645 tons.
“The secretary-general is deeply concerned about the ongoing situation regarding the Black Sea Grain Initiative,” said Stéphane Dujarric, spokesman for Antonio Guterres, the secretary-general of the United Nations. “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. 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.”
Anthony J. Blinken, Secretary of State for the United States, said Russia is weaponizing food.
“The Black Sea Grain Initiative has already moved more than 9 million metric tons of food and brought prices down around the world, which has been critically important for low- and middle-income countries,” Mr. Blinken said. “It has been a success and must continue.
“Any act by Russia to disrupt these critical grain exports is essentially a statement that people and families around the world should pay more for food or go hungry. In suspending this arrangement, Russia is again weaponizing food in the war it started, directly impacting low- and middle-income countries and global food prices, and exacerbating already dire humanitarian crises and food insecurity.”
A report published Oct. 20 by the United Nations Conference on Trade and Development, highlighted the impact of the agreement, noting the initiative doubled the amount of wheat shipped to least-developed countries (LDCs) between August and September — about half a million tons. But wheat exports to LDCs between January and September 2022 totaled less than 1 million tonnes. This implies an export gap of 1.2 million tonnes with respect to 2021.
The initiative has helped to make grain more available and eased pressure on food prices, according to the report said. This helped to improve global access to food, particularly for the poorest and most vulnerable. The report went on to note that prices were rising amid concerns the initiative would be renewed in November.“In a context where trade is very uncertain, signals matter very much,” UNCTAD Secretary-General Rebeca Grynspan said of the Oct. 20 report. “When there is no clarity, no one knows what is going to happen, and speculation and hoarding take over.”