Ukraine is finally starting to feed the world again

Since Russia launched its brutal assault on Ukraine back in February, scant signs of progress towards a peace deal have emerged. Yet one significant development is that Ukraine’s grains are finally flowing again through the Black Sea.

Twenty-five ships, carrying over 600,000 tonnes of vital grain exports, have now left Odessa’s ports following a UN-brokered deal last month. 

In the Black Sea grain deal signed between Ukraine and Russia on 22 July, and brokered by Turkey and the UN, Russia pledged not to target ports while shipments are in transit.

It has cleared the way for Ukraine to export over 20 million tonnes of grain from last year’s harvest, stuck in its Black Sea ports since Russia’s invasion. 

Much depends on this pact. These are grains desperately needed around the world; it’s estimated that 400 million people benefit from Ukrainian imports. Lebanon, for instance, relies on Kyiv alone for 80 per cent of its grain imports.

The deal is effectively the first successful mediation between the two sides since the conflict began. Many were sceptical as to whether it would go ahead, but for now, it seems to be holding. 

On Tuesday, the first shipment of humanitarian food aid set sail from Ukraine — with around 23,000 tons of wheat making their way to Ethiopia. 

Not all of the grain, though, is going to the world’s neediest. Nor are all of the exports wheat, despite war-induced wheat shortages attracting the most international attention. In fact, only a quarter of the 20 million tonnes of grain stuck in Ukraine’s silos were wheat. 

Ships have set sail for the UK, Ireland and Turkey carrying corn, while Italy and the Netherlands have received shipments of sunflower seeds.

But how likely is the pact to hold long-term? 

So far, we’ve seen little to suggest the deal is about to be broken. There is some concern, however, about the quality of grain that has been trapped on the ships or in silos for months on end. 

The first ship that left Ukraine following the deal was rejected by its final buyer in Lebanon over timing and quality issues, according to the Ukrainian embassy in Beirut. 

Some analysts have also voiced concern over whether ships will want to enter Ukraine’s ports in the future. Most of the vessels that have left Odessa so far under the agreement are ones that were already stuck there. 

Yet Yuriy Vaskov, Ukraine’s deputy infrastructure minister, says that Kyiv has already received applications for 30 ships to come to Ukraine in the next two weeks to transport grain. And he is confident that Kyiv can increase the monthly volume of grain exports to three million tonnes in September, and perhaps four million tonnes monthly in the future. For context, four million tonnes was Ukraine’s average monthly grain export in 2021.

How long before we start to see tangible evidence of the grain deal ameliorating global food shortages? 

When it comes to countries at risk of famine – such as Yemen, South Sudan, Ethiopia and Somalia – the degree to which the deal helps to alleviate hunger will depend on how much of this Ukrainian grain is bought up by the UN’s World Food Programme. 

But for countries which aren’t so much suffering from famine as simply struggling with the soaring cost of food, the impact of the deal was felt immediately. 

While global food prices are still high, they dipped as soon as the deal was signed. According to the FAO, the Black Sea agreement has contributed to wheat prices dropping 14.5 per cent, while prices for all cereals dropped 11.5 per cent between June and July. There is still some way to go: cereal prices are still around 17 per cent higher than they were this time last year, and wheat prices remain 25 per cent higher.

Crucially though, we must also remember the deal isn’t just about alleviating hunger and tackling global food shortages. It’s also about saving Ukraine’s large and lucrative farming sector from financial collapse.

According to the Kyiv School of Economics, Ukraine’s agriculture sector has lost 50 per cent of gross output in 2021 thanks to Russia’s invasion. So the deal will provide much-needed relief to Ukraine’s economy. 

Resuming exports enables Ukrainian farmers to sell grain to cover the costs of production. And this offers hope that they will be able to plant crops this autumn.