Ukraine-Russia grain export deal could ease global food crisis

Grain exports from Ukraine won’t get back up and running in a hurry as Ukraine and Russia signed the Black Sea Grain Initiative with the United Nations and Turkey in Istanbul on Friday.

The agreement aims to restore vital supply of grains and fertilizers to some of the most vulnerable populations in the world. 

The urgency of the food crisis caused by Russia’s invasion of Ukraine has not received as much attention as the impact of the invasion on energy supplies, says Stephen Flynn, one of the world’s leading experts on critical infrastructure and supply chain resilience and professor of political science at the Northeastern’s College of Social Sciences and Humanities.

“The disruption that the war in Ukraine has done to the world’s global food supply system creates this huge humanitarian crisis from a standpoint of so many vulnerable populations, but also it is one of probably the most significant global security challenges, because food shortages almost always can lead to civil unrest,” Flynn says.

Russia and Ukraine have been the bread basket of the world and Europe in particular throughout history, because they both were blessed by Mother Nature with ideal climate conditions for growing grains on a large scale, Flynn says. Together Russia and Ukraine produce one-third of the world’s grain, which is for many the staple of the diet, especially in less developed countries.

Strained maritime exports of the Ukrainian and Russian grains, such as wheat and corn, sunflower oils and fertilizers have put about 47 million people at risk of acute starvation in addition to approximately 350 million people that live with acute food insecurity when they can’t get enough calories each day to stay healthy or be able to make a living.

“These are in places like Somalia, Ethiopia, South Sudan, Yemen, Afghanistan … places, which are already suffering from civil unrest and dealing with insurgencies,” Flynn added.

Globalization has encouraged and rewarded efficient supply systems where storing extra inventory becomes costly.

“The system got incredibly efficient, and it allowed us to move these huge volumes,” Flynn says.

About 6 million metric tons of grains would have typically been moving out of Ukraine each month. Now the Ukrainian grain exports have dropped to about 2 million metric tons a month.

Even if countries had some stockpile to give them a little breathing room between shipments, that has been eaten up pretty quickly.

The backlog of Ukrainian grains stranded at the ports is estimated at about 22 million metric tons. With another harvest approaching, the expectations are that another 65 million metric tons are on their way to feed into the markets in 2023.

Under the Black Sea Grain Initiative, the ships will have to stop in Turkish ports, be inspected and unloaded/reloaded. A Joint Coordination Centre will monitor the implementation.

The longer and more cumbersome process will lead to further costs, Flynn says, but it is still cheaper than any other land transportation-based alternatives.

The ships carrying grain will have to navigate minefields in the Black Sea.

Moving grain and fertilizers will benefit the Russian economy and can potentially prolong the war.