Russia announced on Monday, 17 July 2023, that the Black Sea grain deal would not be extended since the start of the Ukrainian conflict in 2014 with the seizure of Crimea and the launch of a full-scale Russian invasion of Ukraine in 2022 in February of that year has been renewed on average within 105 days.
The trade agreement allowed Ukrainian great exports you pass from southern parts of Ukraine connected to the ocean as well as the use of the Crimea peninsula to ship grain through the Black Sea and the Bosporus to the rest of the world.
This initiative has enabled Ukraine to export agricultural products through Russia’s blockade of the Black Sea; however, Ukrainian exports are only at a fraction of pre-war levels.
Before the conflict, Ukraine exported roughly 25 to 30 million tons of corn a year, mostly through the Black Sea, and 16 to 21 million tons of wheat.
Including only three ports has limited the capacity to ship grain through the Black Sea under the pact.
Ukrainians currently have around 18 million metric tons of grain ready to be exported around the globe, with this deal no longer being renewed.
The termination of the grain deal should sound alarm bells for everyone.
As one of the world’s largest grain exporters, Ukraine has played a vital role in feeding the world’s population.
With exports already limited, the end of this deal will likely spark widespread shortages, price increases, and famine.
This will increase food prices by a factor of four which for the United States will be an extra $0.25. Which last time global food prices increased contributed to the Arab Spring was a series of anti-government protests, uprisings and armed rebellions that spread across much of the Arab world in the early 2010s.It began in Tunisia in response to corruption and economic stagnation.
So why did Russia terminate the deal? Reports from the Kremlin state that not all conditions outlined in the deal had been met, so the agreement ceased to be valid.
Admittedly, I’m surprised that the intermittent coordination between Kyiv and Moscow lasted this long, and that’s before we even look at the Kerch Strait Bridge being attacked (again) on the eve of this deal’s expiration date.
The Long-term Geopolitical Consequences
According to the Joint Coordination Centre in Istanbul, the Black Sea Grain Initiative has allowed three Ukrainian ports to export 32.9 million metric tons of grain and other food to the world.
The Russian Federation has repeatedly claimed that rich nations ultimately benefit from the Ukrainian export of grains.
Data from JCC has shown that 57% of grain from Ukraine went to the poorest developing nations such as Sudan, Somalia and Ethiopia, for instance, which are dependent on food imports from Ukraine, he said.
The U.N. Food and Agriculture Organization said this month that 45 countries need outside food assistance, with high local food prices ‘a driver of worrying levels of hunger’ in those places.
However, the nation that gets the most food imports from Ukraine is China, with nearly a quarter of all grain from Ukraine, which feeds the Chinese population of between 800 million to 1.2 billion due to the nation not being self-sufficient or having a diverse enough supply chain to cope with shocks like the Ukrainian conflict.
This could very well be why this deal with the Russian Federation and the Ukrainian government has lasted so long due to the influence of the Chinese Communist Party upon the Russian government led by Vladimir Putin though this is mainly speculation.
There is much doubt from analysts like Peter Zeilhan, who repeatedly stated that the Chinese government, which has become a cult of personality dedicated to President Xi Jinping, can no longer make rational decisions.
Who Will be Hurt the Most
High costs for grain needed for food staples in places like Egypt, Lebanon, and Nigeria exacerbated economic challenges and helped push millions more people into poverty or food insecurity.
Rising food prices disproportionately affect people in developing countries because they spend more money on meals.
Poorer nations that depend on imported food priced in dollars are also spending more as their currencies weaken, forcing them to import more because of climate change.
Under the deal, prices for global food commodities like wheat and vegetable oil have fallen, but the food was already expensive before the war in Ukraine, and the relief hasn’t trickled down to kitchen tables.
Nations only gain their independence in the post-World War II environment and do not have the institutions or the democratic legacy in their DNA, unlike nations like the United States and the United Kingdom, to cope with the rising challenges of an increasingly divided world order.
It’ll be at least a few years before Ukrainian grain is returned to global markets.
In the meantime, nations that will suffer will be people experiencing poverty and those that don’t have oversupply options for feeding their nation’s population.
This will mean war and instability for nations that cannot feed themselves, leading to more regional and civil conflicts within those regions due to mass starvation being the ultimate continuity killer for a nation’s continuity, legacy and existence.
The Russian Federation’s wheat shipments have hit all-time highs following a large harvest.
U.S. Department of Agriculture estimates that it exported 45.5 million metric tons in the 2022–2023 trade year, with another record of 47.5 million metric tons expected in 2023–2024.
PBS Hour News Russia suspends deal allowing Ukraine to export grain, destabilising global food markets link
CNN News Ukraine claims responsibility for new attack on key Crimea bridge link
Reuters Black Sea grain deal: What’s next now that Russia has pulled out? link
Zeihan on Geopolitics Russia Terminates the Black Sea Grain Deal (My Thoughts from the Last Year) || Peter Zeihan link
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