About the Black Sea Grain Deal

Context:

The last ship carrying grain from Ukraine, under a UN-brokered deal that guarantees its safe passage, left the port of Odesa. This deal was set to expire on July 17, and Russia has still not agreed to extend it.

Relevance:

GS II: International Relations

Dimensions of the Article:

1. What is the Black Sea Grain Initiative?
2. Importance of the Black Sea Grain Initiative:
3. Why has Russia not agreed to renew it?
4. About the Black Sea

What is the Black Sea Grain Initiative?

The Black Sea Grain Initiative is a response to supply chain disruptions caused by Russia’s actions in the Black Sea region, which have led to escalating food prices. Here are the key points about the initiative:

• Brokered by the UN and Turkey, the Black Sea Grain deal was signed in July 2022 in Istanbul.
• Initially set for a period of 120 days, with the option to extend or terminate after November, the deal aimed to establish a safe maritime humanitarian corridor for Ukrainian exports, particularly food grains.
• The corridor would operate from three key ports in Ukraine: Chornomorsk, Odesa, and Yuzhny/Pivdennyi.
• The primary objective of the initiative was to stabilize markets by ensuring an adequate supply of grains, thus limiting food price inflation.
• Ukraine is a major global exporter of wheat, maize, rapeseed, sunflower seeds, and sunflower oil.
• Its access to deep-sea ports in the Black Sea allows direct trade with Russia, Europe, and grain importers from West Asia and North Africa.
• Russia’s actions in Ukraine had disrupted this trade route, which previously facilitated the shipping of 75% of Ukraine’s agricultural exports.
• The Black Sea Grain Initiative aimed to address these disruptions and restore the flow of agricultural exports from Ukraine, thereby mitigating the impact on food prices and market stability.

Importance of the Black Sea Grain Initiative:

Supply of Grains:

• Approximately 10.1 million tonnes of grains have been shipped since the initiative started, ensuring a steady supply of food commodities.

Impact on Food Prices:

• The UN Food and Agricultural Organisation’s Food Price Index has shown a six-month consecutive decrease in food prices during the September assessment period.
• This indicates an improvement in the supply situation and the potential for further price drops.

Discouraging Hoarding:

• The initiative has compelled people who were hoarding grain to sell it, reducing the likelihood of profiteering during supply shortages.

Addressing the Cost of Living Crisis:

• The initiative has been credited with making a significant difference to the global cost of living crisis.

Distribution to Different Income Groups:

• About 44% of the shipments reached high-income countries, 28% reached low and lower-middle-income countries, and 27% reached upper-middle-income countries.
• This ensures a broad distribution of grains to meet the needs of different income groups.

Limitations in Addressing Global Hunger:

• Observers note that while the initiative has had a significant reach, it alone cannot solve the issue of global hunger.
• It can, however, prevent the global food crisis from worsening, particularly in the region that is yet to recover to previous production levels.

Why has Russia not agreed to renew it?

• Unmet Promises: Russia claims that the promises made to it under the deal have not been fulfilled. It believes that it is still facing challenges in exporting its agricultural products and fertilizers.
• Barriers on Export: Although there are no direct restrictions on Russia’s agricultural products, barriers related to payment platforms, insurance, shipping, and logistics have hindered its export activities. These obstacles have affected Russia’s ability to export its agricultural goods effectively.
• Concerns about Global Food Security: Russia initially agreed to the grain deal to contribute to global food security. However, it has expressed dissatisfaction that Ukraine has primarily exported to high- and middle-income countries instead of focusing on poorer nations.
• Impact on Food Prices: The United Nations acknowledges that while high- and middle-income countries have benefited from the cooling down of food prices, it also suggests that poorer countries have been assisted in terms of food availability and affordability.

About the Black Sea

• The Black Sea is a marginal sea of the Atlantic Ocean lying between Europe and Asia; east of the Balkans (Southeast Europe), south of the East European Plain in Eastern Europe, west of the Caucasus, and north of Anatolia in Western Asia.
• The Black Sea is bordered by Bulgaria, Georgia, Romania, Russia, Turkey, and Ukraine.
• The Black Sea ultimately drains into the Mediterranean Sea, via the Turkish Straits and the Aegean Sea.
• The Bosporus Strait connects it to the small Sea of Marmara which in turn is connected to the Aegean Sea via the Strait of the Dardanelles. To the north, the Black Sea is connected to the Sea of Azov by the Kerch Strait.

-Source: Indian Express