Known as the world’s “bread basket,” Ukraine grows far more wheat than it consumes and its exports contribute to global food security, especially in African countries, which now fear food shortages (Sergei Supinsky | Afp | Getty Images)
Metropolis Desk-
Even though global inflation is now starting to decline, rising geopolitical tensions may cause food prices to rise significantly.
In response to Russia’s unexpected move to withdraw from a critical agreement authorizing the sale of grain from Ukraine, tensions in Europe increased by almost 9% on Wednesday, and wheat futures are on pace to reach their highest level in three weeks. Tuesday saw an almost 2% increase in corn futures as speculators anticipated a shortage of the basic meal.
Due to Moscow’s withdrawal from the wartime agreement on Monday, food prices could increase significantly and millions of people could go hungry. The pact, according to the White House, was “critical” to bringing down global food costs, which skyrocketed following Russia’s invasion of Ukraine in February of last year.
Adam Hodge, a spokesman for the US National Security Council, stated in a statement that Russia’s decision to discontinue participation in the Black Sea Grain Initiative “will worsen food insecurity and harm millions of vulnerable people around the world.”
On Wednesday, tensions between the two nations rose, making it less likely that the agreement would resume exporting essential commodities across the Black Sea.
On Wednesday, the Russian Defense Ministry asserted that its attacks on Odesa, in southern Ukraine, overnight targeted the city’s fuel and military facilities. Volodymyr Zelensky, the president of Ukraine, claimed on Wednesday that Russia “deliberately targeted the grain deal infrastructure.” Russia’s attack damaged an unspecified “industrial facility” as well as “a grain and oil terminal” at Odesa’s port, the head of Odesa’s regional military administration said.
Wheat prices are still down more than 50% from their all-time high in March 2022.
The Black Sea deal — originally brokered by Turkey and the United Nations a year ago — has ensured the safe passage of ships carrying grain
According to UN data, the agreement has so far permitted the export of close to 33 million metric tons of food through Ukrainian ports. The agreement had been extended three times, but Russia has threatened to end it frequently, claiming that exporting its goods has been hindered.
Vladimir Putin, the president of Russia, said over the weekend that he would not extend the agreement because its primary goal, the provision of grain to underdeveloped nations, had “not been realized.”
The deal’s failure is expected to have effects well beyond the local area.
According to the Organization for Economic Co-operation and Development, Ukraine was the fifth-largest exporter of wheat in the world before the conflict, making up 10% of exports.
Source- BBC News
