A deal to free vital grain exports from Ukraine’s southern Black Sea ports, due to expire on November 19, has been extended by 120 days.
What has been exported?
The agreement created a secure shipping channel for exports from three Ukrainian ports.
So far, around 11.08 million tonnes of agricultural products have been shipped, including 4.5 million tonnes of maize.
Wheat shipments have reached 3.2 million tons, 29% of the total. Other commodities shipped include rapeseed, sunflower oil, sunflower meal and barley.
Has it eased the food crisis?
Reduced shipments from major exporter Ukraine have played a major role in this year’s global food price crisis, but there are also other important factors to consider.
These include the COVID-19 pandemic and climate shocks that continue to challenge agricultural production, most recently droughts in both Argentina and the United States.
The corridor has led to a partial recovery in Ukrainian shipments, but they remain well below pre-invasion levels and will not fully recover anytime soon.
Transporting grain to ports there remains challenging and expensive, while Ukrainian farmers have reduced plantings of crops such as wheat after selling, in many cases, last year’s crops at a loss, and the domestic prices remain very low.
Has it driven down world wheat prices?
Wheat prices on the Chicago Board of Trade rose after Russia’s invasion of Ukraine in February, but are now around pre-conflict levels.
Ukraine’s ability to export millions of tons of wheat through the corridor has been one element that has pushed prices down. Other factors include a record harvest in Russia, this year’s top exporter, the dismal global economic outlook and a strong dollar.
But prices of wheat-based staples such as bread and noodles remain well above pre-invasion levels in many developing countries due to weak local currencies and rising prices of energy that have increased costs such as transport and packaging.
