Baba’s Explainer – Russia’s suspension of grain deal

  • IASbaba
  • November 2, 2022
  • 0
Indian Polity & Constitution
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  • GS-2: Effect of policies and politics of developed and developing countries on India’s interests

Context: Russia has suspended its part of the deal allowing Ukraine to ship grain from its Black Sea ports safely amid a monthslong war, and it appears that the remaining partners are now left to take their chances.

  • Russia halted its role in the Black Sea deal for an “indefinite term” because it said it could not “guarantee safety of civilian ships” travelling under the pact after an attack on its Black Sea fleet.
  • Ukraine said a dozen ships had sailed despite initially reporting that more than 200 vessels, many loaded and ready to travel, were stuck after Russia’s recent announcement.
What is the Black Sea Grain Initiative?
  • Ukraine is one of the world’s largest grain exporters and normally contributes around 45 million tonnes of grain to the global market every year.
  • However, since Russia invaded Ukraine, exports of grain, food and fertilizers from both countries have been significantly hit.
  • The disruption in supplies resulted in rising prices and added to the burden of an already existing food crisis in some countries.
  • In a bid to address this crisis and ensure the smooth movement of supplies amidst the ongoing war, the United Nations and Turkey brokered the Black Sea Grain Initiative on 22 July 2022.
  • The Black Sea Grain Initiative allowed Ukraine to export its grain, food and fertilizer including ammonia to the world via a safe maritime corridor that has three key ports in the country: Chornomorsk, Odesa, and Yuzhny/Pivdennyi.
  • The deal was implemented after a Joint Coordination Centre (JCC) was established at the signing ceremony. The committee comprises senior representatives from the Russian Federation, Turkey, Ukraine as well as the UN.
  • The JCC issued procedures to be a part of the initiative and according to these, ships and vessels that wish to participate will have to undergo an inspection in Istanbul to ensure that they are empty of cargo.
  • Following the inspection, they can sail through the corridor and reach Ukraine ports to load goods.
  • To ensure the safe passage of vessels, JCC monitors them round the clock. On their return journey, the vessels have to go through another round of inspection in Istanbul.
What has the deal achieved?
  • Glimmer of Hope of Peaceful Settlement: The grain initiative has been a rare example of cooperation between Ukraine and Russia since Russia’s invasion in February 2022.
  • Ensured Global Food Security: Before the grain deal was brokered, the US and Europe accused Russia of starving vulnerable parts of the world by denying exports. With global markets tight, poorer countries will have to pay more to import grain. The deal has allowed more than 9 million tons of grain in 397 ships to safely leave Ukrainian ports. This has helped avert food crisis in poorer countries.
  • Helped Tackle Commodity Inflation: The grain agreement has brought down global food prices by about 15 per cent from their peak in March 2022, according to the UN.
    • UN secretary-general had urged Russia and Ukraine to renew the deal when it expires on 19 November.
What has Vladimir Putin said?
  • Since the deal, Russian President Vladimir Putin has alleged that most of the exported grain was going to Europe instead of the world’s hungriest nations.
    • UN humanitarian chief said 23 per cent of the total cargo exported from Ukraine under the grain deal has gone to lower- or lower-middle-income countries and 49 per cent of all wheat shipments have gone to such nations.
    • Ukraine has said more than 5 million tons have been exported to African and Asian nations, with 190,000 tons of wheat sent to countries that are getting relief from the UN World Food Program.
  • Russian President Vladimir Putin said that the suspension of the Black Sea Grain Initiative and attacks on Ukrainian infrastructure were carried out in retaliation to a drone attack on the Russian fleet which he blamed on Ukraine.
  • Meanwhile, Ukraine has not claimed responsibility for the said attack and has denied using the maritime corridor for military purposes.
What happens now?
  • NATO and the European Union have urged Russia to reconsider its decision. U.S. President Joe Biden called Russia’s move “purely outrageous” and said it would increase starvation. U.S. Secretary of State Antony Blinken accused Moscow of weaponising food.
  • Ukraine said 40,000 tonnes of wheat had been loaded onto a ship for the U.N. Food Program and intended for Ethiopia which is said was “on the brink of starvation” and, like Yemen and Somalia, facing “catastrophic” food shortages.
  • US has called for a strong response from the United Nations and Group of 20 (G20) major economies to what it called Russia’s nonsensical move on the grain deal, saying that the move threatened large-scale famine in Africa and Asia.
  • However, Russia snapped back, saying the U.S. response was “outrageous”. Instead, Russia has offered to supply up to 500,000 tons of grain “to the poorest countries free of charge in the next four months.”
  • The Russian Defence Ministry stressed that Russia is not withdrawing but suspending the grain agreement.
  • While sanctions on Russia don’t affect its grain exports and a parallel wartime deal was meant to clear the way for Russia’s food and fertilizer shipments, some businesses have been concerned.
  • Developing nations will have to find new grain suppliers and pay more from countries such as the US, Argentina and Australia, where dry conditions or rain are posing problems
What else affects food supply?
  • Scepticism amongst traders: There were doubts that Russia’s decision will have a lasting impact on the price and supply of corn and grain. Commodity traders were sceptical that the deal would last, and that’s why corn prices have gone up, not down, since the arrangement was reached in July.
  • Grim situation in US market: Grain markets also are focused on other issues, including low water levels in the Mississippi River that slow the export of US farm products, a disappointing corn crop in the American West and the threat of a US rail strike.
  • Low rainfall in parts of Africa: After four failed rainy seasons in the Horn of Africa, millions of people are hungry and millions of livestock that are a critical source of food and wealth are dying. The latest setback in Ukrainian exports is another layer of stress.
  • Lack of Alternatives in Poorer Africa: In poorer North African and Middle Eastern countries where bread is a critical part of people’s diets, there may not be alternative staples like rice in Asia or sorghum elsewhere in Africa.
  • Currency Crisis: In Egypt, the world’s largest wheat importer, President Abdel Fattah el-Sissi personally visited wheat farms when the harvest started this spring. But an economic crunch has made it more difficult to buy imported wheat, as Egypt’s currency has reached an all-time low against the US dollar.

Main Practice Question: What Russia’s suspension of grain deal could mean for the world’s fight against hunger?

Note: Write answer his question in the comment section.

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