1. Why is Ukraine so influential in the global food markets?
The dark, rich soils of the flat plains of Ukraine, Europe’s second largest country by area, are ideal for farming. Ukraine’s cheap food has helped shape the course of European history, feeding the populations of rapidly growing industrial cities in the 19th century and maintaining the vast Soviet Union through decades of isolation. Before the war, Ukraine exported more grain than the entire European Union and supplied almost half of the sunflower seeds and oil traded globally. More than 30 countries that are net importers of wheat depend on Russia and Ukraine for more than 30% of their wheat import needs.
2. How did the war affect exports?
Exports collapsed in late February when Russian forces invaded and blocked Ukraine’s major export terminals in Odessa and Mykolaiv. By the middle of the year, about 25 million tonnes of grain harvested in 2021 was still stuck in the country, just as a new wheat crop was beginning. Some wheat, maize and barley were carried on roads, railroads, and on the Danube River ferries to ports in Romania, Poland and the Baltic Sea. These routes could handle only one-fifth of Ukraine’s pre-war exports and efforts to increase volumes were halted due to lack of fuel for trucks and transport bottlenecks. Ukraine’s former Soviet rail tracks use a wider gauge than their western counterparts, causing border delays of up to 30 days. Cereal exports were only 1.7 million tonnes in July, up from about 5 million tonnes monthly in a normal year.
3. Why does this matter?
A drop in deliveries from the fourth-largest grain exporter sent prices shooting higher and left import-dependent countries in Asia, Africa and the Middle East looking to secure alternative supplies. By mid-July, however, the price of wheat had fallen back to its level before the invasion. Nevertheless, the shortage had contributed to sporadic political unrest and in May the United Nations World Food Program warned that 43 countries were at risk of famine. Ukraine has been one of the biggest contributors to the WFP: Eritrea and Somalia relied almost entirely on Russia and Ukraine for their wheat supplies last year, while Tanzania, Namibia and Madagascar over 60% of supplies, according to the United Nations. depended on them. Information
4. What is the new agreement?
A breakthrough in months-long talks to resolve the standoff came on 22 July, when Russian and Ukrainian officials signed deals to allow Turkey and the United Nations to resume exports from the Odessa, Pivdenyny and Kornomorsk ports. Did it The three places together accounted for more than half of Ukraine’s sea grain exports in the 2020-2021 season. The first grain ship sailed from Ukraine for Lebanon on 1 August under the agreement.
5. What are the barriers to increasing exports?
The plan’s success rests on the Kremlin’s adherence to the agreement and with the war still raging there are concerns about securing ships, crews and insurance to carry the backlog grain. Just hours after the signing of the deal, Russia attacked the sea port of Odessa with cruise missiles, raising doubts about its commitment. While the largest export terminals were not extensively damaged and are still under Ukrainian control, the port and coastal waters are littered with mines. Ukraine has accused Russia of stealing and exporting grain. Russia has benefited from the blockade as it has deprived the Kyiv government of revenue to maintain resistance, inflicted economic pain on Moscow’s western adversaries and increased the price of its own wheat in the international market (Russia Ukraine is a bigger wheat exporter than .
6. How is the war affecting Ukraine’s next crop?
President Volodymyr Zelensky said this year’s harvest could be halved from last year’s, as fields were damaged or cut down by the conflict. Farmers who are able to collect their crops have no space to store it as the silos are still loaded with last year’s grain. The lack of storage capacity, combined with declining incomes left farmers without money to buy seeds, means exports could take years to fully recover.
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