Agri Commodities

Ukrainian Grain Going to Europe Instead of Africa

Ukrainian Grain Going to Europe Instead of Africa

This July, the UN and Turkey brokered a deal to allow the safe passage of grains between Ukraine and Russia. With tensions running high between the two countries, this was a welcome relief for the global market. Ukraine and Russia are among the world’s top exporters of key cereals such as wheat and sunflower, as well as fertilisers. However, Russia’s invasion of Ukraine in February and subsequent blockade of the country’s Black Sea ports brought exports to a halt, driving up global market prices. The Black Sea Grain Initiative allowed Ukraine to resume exports, helping to stabilise the market and bring down prices. 

According to reports, Ukraine has been exporting its wheat under the international humanitarian aid program. However, it appears that the export of wheat from Ukraine has been to the EU instead of the developing countries, thereby defeating the very aim of the program. Countries across Africa were heavily or completely dependent on Ukraine and Russia for wheat imports and due to this, they might be further pushed into hardship. 

According to a report, outbound shipments of wheat, corn, barley, and other agro-commodities from Ukraine through the Black sea corridor have reached a tune of 2.3 million tonnes. Out of the total, around 900,000 tonnes were shipped to the ports of EU member countries. The report also states that, from the data available, it is not possible to ascertain whether the shipments’ final destinations were the EU ports or they only acted as a transit point. However, given the large volume of exports, it is likely that at least some of the shipments are destined for EU member states. 

What is the Black Sea Grain Initiative? 

The Initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian ports also called the Black Sea Grain Initiative, is an agreement between Russia, Ukraine, Turkey and the United Nations which was established on 22nd of July 2022, to establish the framework of exports of Ukrainian grain, food and fertilisers via the Black Sea. Notably, the agreements also lifted restrictions on Russian grain and fertiliser exports. 

In the aftermath of Russia’s invasion of Ukraine, a de facto blockade was put in place by Russia of ports in the Black Sea. This blockage prevented commercial shipping from exporting Ukrainian grain, and as Ukraine is a major Exporter of Grain, the prices for this essential commodity surged, making millions of poor people vulnerable to acute hunger. Ukraine was unable to export its grain and other agricultural produce due to the blockade, while international shippers and insurers were unwilling to enter into contracts with Russians for fear of violating US and EU sanctions. 

Conclusion 

The grain deal between Russia and Ukraine with the United Nations and Turkey has paved the way for the export of 22 million Ukrainian grains which remained stuck in three Black Sea

Ports, becoming a “beacon of hope” for millions of people across the globe. However, their hopes are not coming their way but rather journeying toward EU ports.

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