In the months since Russian aggression has ensnared Ukraine, blockades in the Black Sea have impacted the export of millions of tons of grain from the nation known as the breadbasket of Europe. But on Friday, the two warring nations signed separate landmark agreements with Turkey and the United Nations allowing the Ukrainian ports to resume grain exports.
The hope is that this will ease the growing hardships of a global food crisis and will bring greater stability to Ukraine.
“Unblocking three ports (Odesa, Pivdenny, and Chornomorsk) is strategically important as it signals all market participants to continue their work,” said Suzana Hryhorenko, executive director of the National Seeds Association of Ukraine. This is especially significant as market participants recently predicted that Ukrainian corn crops could decrease dramatically next year — from 6 million down to 3 million hectares.
Turkey, a NATO member that has good relations with both Russia and Ukraine, was at the center of the two-months-long talks to reach the agreement. The historic city of Istanbul, Turkey, also controls the straits with access between the Black Sea and the rest of the world, making the country a key player in these negotiations.
At issue is what is believed to be 25 tons of Ukrainian grain and oilseeds that are currently stuck in the besieged ports. A tentative deal was reached with the sides last week.
According to The Kyiv Independent, a Ukrainian publication, “The agreement doesn’t mention lifting Russian sanctions, something the Kremlin has asked for to allow Ukrainian grain to be shipped abroad.”
“The question has not been what is good for one side or the other,” said United Nations Secretary-General Antonio Guterres. “The focus has been on what matters most for the people of our world. And let there be no doubt — this is an agreement for the world.”
Ukraine is among the world’s leading grain exporters, supplying more than 45 million metric tons of grain annually to the global market, according to the UN Food and Agriculture Organization.
“Let’s be realistic and consider situations if the agreement does not go as planned and export continues to fail,” Hryhorenko said. “In such a scenario, farmers are most likely to selectively choose which crops to harvest. For example, there would be no point in risking lives to harvest wheat or corn while understanding that the chances that it could be exported are slim. …
“Suppose farmers were to decide to skip a season. In that case, that could lead to a crisis in other related sectors, in particular, animal husbandry (which needs silage made from corn, compound feed, etc.), seed industry (big industry players could leave the market), chemical industry (decrease in the consumption level of fertilizers and crop protection products to be expected).”
The Russian invasion, which began in February, has sparked record food and fuel prices, as well as supply chain issues, with mountains of grain stocks stuck in silos.
“Sowing, growing, and harvesting under constant sirens and shelling have proved to be a costly business. And it becomes even more expensive when the entire sector has no funds due to the Russians blocking ports,” Hryhorenko explained. “The same applies to other related areas. As in the butterfly effect: Farmers do not harvest corn from the field because there is no export and sales, processing enterprises cannot produce compound feed, and the animal sector (poultry and dairy farms) begins to import or look for new ways to supply. As a result, dairy, meat, eggs, and everything derived from it, also become more expensive.”
In addition to hopefully stabilizing global food prices and these related industries, the agreement would “bring relief for developing countries on the edge of bankruptcy and the most vulnerable people on the edge of famine,” Guterres said.
This article was updated on July 25, 2022, with quotes from the National Seeds Association of Ukraine.