Just two months ago, on July 22, Russia and Ukraine reached an agreement after lengthy negotiations on exports of 22 million tons of grain blocked by the war in Ukrainian ports. The “grain trade” was supposed to solve global market shortages, lower food prices and alleviate the world hunger crisis. UN Secretary-General António Guterres called the deal a “beacon of hope”. However, the deal turned out not to be a resounding success. I’ll list why not.
contract, officialBlack Sea Grains Initiative”, Odessa, Chornomorsk and Yuzhnee Ukrainian ports for safe docking of ships. There they are filled with grain and escorted out of Ukrainian waters to Ukrainian ships because of mines.
Once on the high seas, they can sail to Istanbul (Turkey). Joint control center (along with Turkish, Russian, Ukrainian and UN personnel) checks the ship’s weapons. You can then continue sailing to your final destination. Her contract is for four months and can be extended thereafter. Two months later, or on the way, the United Nations calls the “grain trade” a success, but here are six reasons why it’s not.
1. Most grain goes to rich countries
Since the Grain Trade took effect on July 22, 185 ships have already set sail with a total of 4.2 million tons of grain and other foodstuffs.
Three-quarters of this went to wealthier countries (high-income and upper-middle-income countries). His 47% of all Ukrainian grain ended up in European ports. It is also worth noting that Turkey, which negotiated the agreement, became the largest importer (18%).
Poorer countries (low-middle and low-income countries) import only a quarter of their cereals and are most food insecure.
2. Few grains were sent to countries where hunger was most severe
The countries most in need of grain and on the brink of famine, namely the Horn of Africa and Yemen, collectively receive only 4% of Ukraine’s grain. That’s enough to solve the food crisis.
Russian President Vladimir Putin has always stressed that “European countries should act like colonial rulers and keep food away from poor areas.”
The highest bidder gets the grain.
But according to agricultural economist Jeroen Buysse (University of Ghent), it’s mostly the economic laws that continue to play an important role. “This deal has not changed that. Whoever offers the best price gets the grain. The deal has not changed global inequality. country.”
Since the deal was signed, it has become almost impossible for importers in poor countries such as Yemen to buy grain from Ukraine. But his third of wheat came from there before the war.
“Our company has been trying to buy grain for weeks, but we are no match for our competitors from the West,” said a Yemeni importer. he wishes to remain anonymous. “They can put in more money and sign long-term contracts. Yemen does not have enough storage capacity to take that risk. We are asking for 100% advance payment because we are from the country, so far the grain deal has not had a positive effect on us.”
3. The World Food Program Had Only Two Ships In Famine Zones
Before the war, the United Nations World Food Organization sourced more than half of its wheat purchases on international markets from Russia and Ukraine. Now he could fill only three ships with wheat (equivalent to about 90,000 tons). WFP also has to compete in the free market and is now paying more than before.
A grain ship arrived in the East African port of Djibouti in early September. The cargo eventually ended up in Ethiopia, one of her countries where hunger was most severe. A second ship (laden with 37,400 tons of wheat) arrived in Yemen. The third ship is still on its way to the Horn of Africa. A country where the United Nations now expects outright famine at any moment.
“But that is not enough to stop famine or solve food crises,” WFP spokesman Jordan Cox said.
4. Ships are mainly loaded with corn, usually for animal feed.
Almost half (47%) of the cargo on ships departing from Ukraine consists of corn. It is typically used in animal feed and biofuel production. “In Africa, maize quickly enters the food chain as a staple food,” says Professor Buysse. richer people. “
Wheat is used in most low-wage countries to make basic foods such as pasta and bread.
The rest is filled with foods such as soybeans and rapeseed. Also in the port of Ghent, a ship with 30,000 tons of oilseed rape (something similar to oilseed rape) arrived on 9 September. “It’s used in oils and animal feed,” says Jeroen Buysse, a professor of agricultural economics.
5. Grain prices fell, but not (only) because of the grain trade
UN Secretary-General António Guterres said: “Grain prices have already fallen by 15% since hitting a record high in March.
“Exactly,” Professor Buysse agrees. Therefore, grain trading has a very limited impact on grain prices, as seen in the chart below.
6. Russia threatens to blow up the grain deal
Russian President Vladimir Putin has threatened to blow up the grain trade since early September, which could immediately boost grain prices. but it failed completely.
Although there are no trade restrictions or sanctions on Russian food exports, leaving the country is still difficult. The main reason for this is the sanctions on Russian banks and the fact that many traders no longer want to trade with Russia.
Therefore, the grain trade fails to meet immediate expectations. Falling prices are only a very limited consequence of the grain trade and can also be reversed in this way. Countries on the brink of famine receive little grain from Ukraine.