The quadripartite agreement which for a year has guaranteed the safe export of Ukrainian grain via the Black Sea expired Monday evening at midnight in Istanbul. This end of the agreement, which has allowed the exit of 33 million tonnes of grain from Ukraine in one year, should have little immediate impact, at a time when the northern hemisphere is harvesting, but will inevitably create tensions and food inflation in the medium term. The situation is very different from the one at the end of February 2022, when Russia invaded Ukraine, with the effect of closing the Black Sea to navigation, the main export route for agricultural products from Ukraine.
This country was then the first world exporter of sunflower oil, the fourth for wheat and corn. The opening of the corridor on August 1, 2022 relieved importing countries, particularly in the Mediterranean and Africa, driving down world prices, which had reached unprecedented levels in May. In two years, Ukraine has seen its cereal production almost halve, with forecasts of 25 million tonnes of maize and 17.5 million tonnes of wheat for 2023-2024, compared to 42 million and 33 million respectively in 2021-2022, according to the latest report from the United States Department of Agriculture.
In addition, in recent months, “we observed a bottleneck in the Bosphorus, with very slow traffic”, in particular due to a lower number of Russian inspections on ships using the corridor, notes Edward de Saint -Denis, broker at Busty
UN Secretary General Antonio Guterres reacted to the Russian decision, stressing that “hundreds of millions of people are facing hunger” and that they will “pay the price”.
The head of the American diplomacy called the Russian decision “unacceptable” and assured that this decision would lead to an increase in food prices. Moscow’s choice to “weaponize food…will make it harder to get food to places that desperately need it and drive up prices,” the secretary of state said. American Antony Blinken.
As for Ukraine, it has shown its willingness to continue exporting its cereals via the Black Sea, with or without Moscow’s agreement on ship safety. Its president, Volodymyr Zelensky, has said that kyiv is ready to continue its grain exports via the Black Sea. “Even without Russia, everything must be done so that we can use this corridor (for exports) in the Black Sea. We are not afraid,” Volodymyr Zelensky said.
Even before the opening of the corridor, the European Union set up the “Solidarity Lanes” of land and river corridors, intended to facilitate Ukrainian exports across Europe. The Farm Foundation, a think tank dedicated to global agricultural issues, estimates that currently half of Ukrainian exports go through these channels, particularly through Poland and Romania.
At present, the world does not lack wheat. But, underlines Damien Vercambre, of the cabinet Inter-Courtage, “most of the exportable wheat is in Russia, with approximately 12.5 million tons of stocks, and it is the cheapest wheat in the world”. Russia could make up for at least part of the Ukrainian shortage, as could the EU, with a harvest that promises to be very decent. But this would accelerate the dependence of third countries on Moscow and would be difficult to manage in the event of a major climatic accident.
You have to differentiate between corn and wheat. China, which is by far the main beneficiary of the maritime corridor for corn, will be able to turn to Brazil, which is currently selling at a lower price and whose harvest has been record. The situation is more complex for wheat, a bread cereal. If the volumes exist, requesting countries can be supplied, but at what cost? “A lasting closure of the corridor will have an impact on food inflation, which will affect food security,” said Olia Tayeb Cherif, from Farm.
Already, states, such as Egypt recently, are struggling to honor payments for certain tenders. Moreover, food aid itself could be weakened, since “Ukraine is a supplier of the World Food Programme: around 8% of the volumes of Ukrainian wheat exported went to the WFP, destined for countries such as Yemen, Afghanistan and the Horn of Africa,” she points out.
