Russia has suspended participation a deal that let Ukraine ship its grain through its ports on the Black Sea, upending a pact that mitigated a global food crisis. Russia’s exit could again threaten food prices, and food insecurity, worldwide.
Since withdrawing on Monday, Russia has launched strikes against Odesa, one of three critical Black Sea ports that exported Ukrainian grain and other agricultural products under the Black Sea Grain Initiative. On Wednesday, the Russian Ministry of Defense said it would consider any ship bound for Ukraine to potentially be carrying weapons, suggesting commercial ships could be deemed military targets.
This apparent escalation from Russia is another blow to the grain deal brokered less than a year ago by Turkey and the United Nations. Russia had already been substantially obstructing the deal, but quitting it officially will make it even more challenging to export Ukrainian grain. That could destabilize global food prices and jeopardize the most food-insecure countries and populations, which often rely on agricultural exports. Russia’s decision to quit the deal, United Nations Secretary-General Antonio Guterres said, “will strike a blow to people in need everywhere.” On Wednesday, wheat prices surged to some of the highest levels since the invasion in February 2022.
Indeed, this deal existed to help avert a greater global crisis in food security, of which Russia’s war in Ukraine is just one part. Eliminating Ukrainian supplies may tighten agricultural markets and potentially put more pressure on places experiencing hunger emergencies. The World Food Programme (WFP) estimates about 345 million people face high levels of food insecurity in 2023, with about 129,000 people potentially confronting famine in places like Burkina Faso, Mali, Somalia, and South Sudan.
The Black Sea Grain Initiative was “never a panacea for Ukrainian agriculture,” said Joseph Glauber, senior research fellow at the International Food Policy Research Institute; even with some foodstuffs going out, high input costs, conflict, and Russian occupation have dramatically driven down Ukrainian agricultural production and exports.
But some grain getting out of the Black Sea was better than none at all. The deal did serve as a “relief valve” for Ukraine’s exports, said Caitlin Welsh, director of the Global Food and Water Security Program at the Center for Strategic and International Studies (CSIS). Even a relief valve, turned off, could make global food prices volatile once again. And now Russia has escalated its threats against Ukrainian-bound ships and unleashed a wave of air strikes against critical infrastructure in Odesa. All of that could threaten Kyiv’s ability to export grain now and in the future, with or without a deal.
The Black Sea Grain Initiative, briefly explained
Ukraine has been dubbed “Europe’s breadbasket,” with the country providing about 10 percent of the global share of wheat exports and almost half of the world’s sunflower oil. Almost 90 percent of Ukraine’s grain exports left from Black Sea ports.
Russia’s invasion in February 2022 effectively choked off that route. Russian fleets blocked the Black Sea; many parts were heavily mined. Ukraine shipped some grain west, through Europe, but inadequate infrastructure and a raging war made these routes costly and slow, an insufficient replacement for the sea trade. In the spring of 2022, millions of tons of grain were stuck in silos in Ukrainian ports.
Russia’s invasion wasn’t the only thing putting pressure on the global food supply. Years of droughts in many places and Covid-19 supply disruptions added stress to the market. But the war in Ukraine piled on top of all that, and global food prices surged. Other countries freaked out and began to curb their own exports of food and fertilizer over domestic shortage fears, pushing prices higher. That made food even harder to afford for poorer countries, many of which depend on agricultural imports. That threatened to deepen a worldwide hunger crisis.
The Black Sea Grain Initiative averted the very worst of that catastrophe. Guterres hailed it as a “beacon of hope” when Turkey and the UN brokered the deal in July 2022.
The deal allowed for exports of commercial food and fertilizer from three Ukrainian Black Sea ports: Odesa, Chornomorsk, and Pivdennyi (previously called Yuzhny). Teams representing all parties to the deal (Ukraine, Russia, Turkey, and the UN) would inspect ships going in and out of these ports, and once loaded with cargo, ships wouldtake an established route, avoiding mined areas, through the Black Sea toward Istanbul.
Western penalties never restricted Russia’s own grain and fertilizer exports, but as part of this deal, Russia got some additional guarantees to ensure its agricultural and fertilizer products would remain exempt from any sanctions.
More than 32 million metric tonsof grain and other food products left through this Black Sea route in thepast year. As of July 2023, the World Food Programme purchased about 80 percent of its wheat through the initiative and directed some 725,000 metric tons to the most food-insecure places in the world, like Afghanistan, Yemen, and Somalia.
In reality, as Murithi Mutiga, director of the Africa Programme at the International Crisis Group, said in a note sent to reporters, not a lot of the Ukrainian grain landed in poorer countries in places like Africa, as the UN had initially envisioned. China was the biggest purchaser, buying about 25 percent of Ukrainian grain shipped out.
But the deal did help stabilize global food prices and prevent spiraling food insecurity. “The fact is, with the agreement, global prices have been lower, so that’s all very positive,” Glauber said.
The deal also provided a small lifeline for a Ukrainian economy destroyed by Russia’s invasion. But Ukraine’s agricultural production is nowhere near pre-war levels, down by about 35 percent, according to Glauber. The war continues to complicate both planning and planting. Everything is more expensive or harder to get, and some agricultural regions exist along the war’s front lines; even in liberated territories, there are risks, like landmines.
This would all be far worse without the Black Sea route; the infrastructure and capacity just don’t exist to handle the same loads through train and trucking or canal routes into European ports. Those efforts have also caused political tensions, as farmers in neighboring European countries have complained that Ukrainian grain is ending up in local markets, pricing them out. All of these challenges may flare up even more intensely if Russia remains out of the deal.
Why is Russia quitting the grain deal?
The Kremlin denied its withdrawal from the deal Monday was linked to the likely Ukrainian-led attack on Kerch Bridge that links the Russian mainland to Crimea, but the timing was notable.
Still, the grain deal was under strain even before Russia pulled out. It had been extended three times, most recently in May, but lately negotiations have been fraught. The Kremlin has only agreed to short-term extensions of 60 days, so every two months the initiative’s fate is uncertain. And each time, Russia does a will-they-won’t-they dance, increasingly using the deal as leverage to get more favorable terms for itself.
Moscow has also pulled out once before, in October, shortly after Ukraine attacked a Russian naval base. During that time, Ukraine, the UN, and Turkey continued to transport grain through the sea routes. Russia rejoined a few days later, saying Turkey and the UN had secured sufficient assurances from Kyiv that it would not use these sea corridors for military purposes.
Even inside the deal, the Kremlin has obstructed its implementation. Most recently, Russia had been failing to provide required inspectors for ships. Overall grain shipments have been down in recent months; in May, just 1.3 million metric tons got out, compared to a peak of 4.2 million metric tons of grain in October 2022, according to UN data. As of early July, shipments are way below that, and the port of Pivdennyi has been at a standstill.
Russia has protested that the deal is too favorable to Kyiv, which is a bit rich. Russia has “relatively nothing to complain about compared to Ukraine, whose agriculture sector has been decimated due to Russia’s war,” Welsh, of CSIS, said.
Moscow is trying to use its participation in the grain deal as a chip to get additional sanctions relief. The Kremlin says even if its agricultural products are not under sanction, its isolation from global banking and payment systems has made it harder to do transactions and business. This is an interesting take, as Russia had a pretty great harvest and its wheat shipments have hit all-time highs (which also means Russian farmers will benefit if grain prices now rise.)
Russia is also upset about a pipeline that, before the war, moved ammonia from Russia to Ukraine’s port at Odesa. The pipeline has been shut since 2022, but a blast in early June (around the time of the Nova Kakhovka dam destruction) damaged the pipeline. Russia has previously accused Ukraine of “sabotage” and has said this would have negative impacts on negotiations around the grain deal.
Russia, then, has been advertising this brinkmanship for quite some time. According toRobert Hamilton, head of Eurasia research at the Foreign Policy Research Institute, this is what Russia does: instrumentalize agreements to try to get what it wants. “Russia was going to stay in the grain deal only so long as it benefited Russia more than it benefited the other parties to the deal, or at least as much,” Hamilton said. Once that deal is no longer in Russia’s interest, or it doesn’t get the benefit from it, or it wants to tie it to something else, he added, “it will violate it or just pull out of it until it gets what it wants.”
Guterres reportedly sent Vladimir Putin a proposal that would reconnect a subsidiary of Russia’s agricultural bank to SWIFT, the global payments system, an apparent carrot to get Russia to stay in the deal, though the status of that is not clear, nor whether it will be enough (Russia wants its whole agricultural bank reconnected, which the European Union has previously said it will not do). It may not matter, because Russia may see more benefit from being outside of the deal, where it can push its demands — and also put more pressure on Ukraine.
“One of the goals they have with the invasion is to strangle the Ukrainian economy,” said Volodymyr Dubovyk, director of the Center for International Studies at Odesa I. I. Mechnikov National University and a visiting professor at the Fletcher School at Tufts University. “The grain deal was a way out for Ukraine, so [Russia] didn’t like it.”
What does Ukraine — and the world — do now?
On Wednesday, Russia bombarded Odesa for the second day. Ukraine’s air force said Russia launched cruise missiles and attack drones, with Ukraine intercepting some, but not all, of the strikes. The mayor of Odesa, Gennadiy Trukhanov, said the city had not recalled “such a scale of attack since the beginning of a full-scale invasion,” according to the Washington Post.
“Russian terrorists deliberately targeted the grain deal’s infrastructure, and every Russian missile is a blow not only to Ukraine, but to everyone in the world who wants a normal and safe life,” Ukrainian President Volodymyr Zelenskyy said on Telegram. The Kremlin claimed these strikes were in retaliation for Ukraine’s attack on the Kerch Bridge.
“They’re constantly reminding Ukraine that it can reach the infrastructure that we need for the deal to operate,” Dubovyk said ofRussia. He added that this was an “exchange of signals”; Ukraine, with its likely Kerch Bridge sabotage, had also tried to remind Russia it is not untouchable.
Those kinds of hostilities are an ominous sign for the future of the grain deal. Russia’s blockade of Ukrainian ports has been a deliberate effort to strangle Ukraine’s economy, another pressure point to try to raise the costs of Ukraine’s resistance. Right now, Kyiv’s counteroffensive is slow going, but it is still trying to stretch Russian troops and reclaim land. Putin may be offering another warning that, in a war of attrition, Moscow still has the advantage.
That makes it hard to predict what Russia will do next, though Turkey and the UN are furiously trying to urge Moscow back into the deal. Turkish President Recep Tayyip Erdoğan said this week he believed “my friend Putin, wants the continuation of this humanitarian bridge.”
That friendship is in a bit of a rough patch of late, so it’s hard to know how that might affect any diplomacy on the grain deal. International pressure may still matter here; in the past, African leaders have urged Putin to free up Ukrainian grain, and China, one of Russia’s most necessary partners right now, has been a major beneficiary of the grain deal.
The bigger question will be what happens if Russia stays out of the grain pact indefinitely. Ukrainian President Zelenskyy has said that the grain deal should continue to operate with or without Russia now.“We are developing options for action and agreements to preserve Ukraine’s global role as a guarantor of food security, our maritime access to the global market, and jobs for Ukrainians in ports and in the agricultural industry,” Zelenskyy wrote on Telegram this week. “We are fighting for both global security and our Ukrainian farmers.”
It’s unclear for how long that would be feasible given Russia’s warning that any ship going to Ukrainian ports could be deemed to be carrying military cargo. The Kremlin hadalso previously warned of “risks” if ships operate in the Black Sea without “appropriate security guarantees.” These threats are a big deal, as the reason the grain deal worked is that it offered assurances to vessels; without them, shippers and insurers may see sending ships into the Black Sea as far too risky a venture, and it would dramatically raise the costs to export any agricultural products through these routes.
Even if Russia reenters the deal, it will remain an imperfect solution to remedy Ukraine’s agricultural economy and to ease global price pressures. Russia’s continued war in Ukraine means unpredictability and uncertainty, and that is without knowing where the next crisis or disruption might come from. What is happening in Ukraine, said Kate Phillips-Barrasso, vice president of global policy and advocacy at Mercy Corps, is “like pouring gasoline on a fire that was already significantly burning.”
Update, July 19, 3:30 pm ET: This story, originally published on July 19, has been updated with the latest news, including new comments from the Russian Ministry of Defense.
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