A few hours after the June 16th explosion on the bridge connecting Russia with occupied Crimea, the Kremlin announced the termination of the year-old U.N.-mediated agreement that allows Ukraine to transport grain across the Black Sea. At the same time, the country’s foreign ministry said the explosion had nothing to do with the withdrawal from the grain deal.
Moscow has stated that the main reason for announcing the cessation of the agreement was the failure to loosen constraints on Russian exports of food and fertilizer.
The Black Sea Grain Deal participants – the United Nations, Turkey, and Ukraine – have all been informed by Russia’s foreign ministry that the deal will cease on Monday, July 17.
On Sunday, the last vessel departed from Ukraine under the agreement. Data shows that the deal had made it possible for Ukraine to export around 32 million metric tons of corn, wheat, and other commodities from July 2022 until now.
See also: Black Sea Initiative: Key facts and figures
The importance of the grain deal
The UN-brokered agreement was intended to secure the transportation of Ukrainian cereals, mainly to sub-Saharan Africa. Under the terms of the Black Sea deal, ships arriving and leaving Ukrainian ports did not come under attack.
Ukraine and Russia each reached a separate agreement in July 2022 that gave Ukraine permission to return to activities at three Black Sea ports. The agreement aimed to reduce global food commodity prices which had witnessed a sharp rise following the 2022 invasion of Ukraine.
According to the UN Food and Agriculture Organization, the price of food decreased globally by almost 20% once the agreement was reached and grain supplies resumed.
See also: What happens if Russia abandons the UN-backed grain corridor? | Experts’ Opinions
What was shipped overseas via the Black Sea Grain Deal?
As of May 2023, maize, the crop most impacted by disruptions at Ukrainian granaries at the start of the war, made up for over 50% of the load. In order to make room for wheat from the summer crops, this had to be shipped immediately to buyers.
Source: European Council
What are the consequences of Russia’s suspension of the grain deal?
The termination of the Black Sea Grain Deal by Russia may increase food prices around the world. This is the main concern for less wealthy and smaller importers in developing nations such as Egypt.
In addition to the fact that Russia is a global leader in fertilizers, together with Ukraine the two countries are among the largest exporters of grains. Moreover, both nations are significant players on the global markets for commodities such as wheat, barley, maize, rapeseed, rapeseed oil, and sunflower oil.
Along with the grain deal, a three-year agreement was made in 2022 under which U.N. officials decided to help Russia to export its food and fertilizers to other countries.
According to Moscow, the stipulations have not been fully carried out. Meanwhile, the West claims that Moscow is attempting to limit financial sanctions by using the grain deal as a tool because agricultural exports from Russia are exempt from these restrictions.
