The renewal of the UN-led Black Sea Grain Initiative is vital to continuing to drive global food prices down and ensuring food security worldwide, especially in developing countries
Geneva: An UNCTAD report published today underlines it is critical to renew the Black Sea Grain Initiative next month.
The initiative helped to make the grain more available and eased pressure on food prices. This in turn helped to improve global access to food, particularly for the poorest and most vulnerable. The prospect of the initiative and the reopening of the Black Sea ports helped to push down historically high market prices.
But prices are rising again amid mounting concerns about whether the initiative will be renewed, and the threat of further disruptions to trade in the Black Sea and the closure of grain corridors.
“In a context where trade is very uncertain, signals matter very much,” UNCTAD Secretary-General Rebeca Grynspan said. “When there is no clarity, no one knows what is going to happen, and speculation and hoarding take over.”
The report refers to the Food Price Index published by the UN Food and Agriculture Organization (FAO), which showed that the prices of global food staples declined in recent months – by about 8.6% in July, 1.9% in August and 1.1% in September 2022.
It warns that with the initiative ending in November and its renewal uncertain, the prices of some commodities, such as wheat and maize, are rising again. “Without the initiative, there is little hope for providing food security, especially in developing and least developed countries,” it stated.
The initiative signed in July 2022 to resume exports of Ukrainian grain via the Black Sea amid the ongoing war offered hope and showed the power of trade in times of crisis. The report says that thanks to the initiative, port activity in Ukraine was picking up and large shipments of grain were reaching world markets. As of October 19, 2022, the total tonnage of grain and other foodstuffs exported through the initiative had reached almost 8 million metric tons.
“The UN-led Initiative has helped to stabilize and subsequently lower global food prices and move precious grain from one of the world’s breadbaskets to the tables of those in need,” the report says.
Increasing port activity
As the war erupted in Ukraine, the world watched as valuable grain corridors were closed off. Weekly ship departures from Ukrainian ports plummeted. There was a marginal recovery in subsequent weeks but port departures remained considerably below their 2021 levels.
It was only after the signing of the UN-led initiative, there was a gradual rise in ship departures. While shipments are still about 40% to 50% below the pre-war period, the report says that the trend is in the right direction.
Number of departures of all cargo ships by week
Under the UN-led initiative, three seaports were reopened – Odesa, Chornomorsk, Pivdennyi/Yuzhny. As a result, the number of port calls increased and the volumes carried rose significantly.
The weekly tonnage of grain shipped under the initiative reached 1.2 million tons by September 2022 and although this was still below 2021 levels, “the gap is closing”.
The initiative reopened the grain gates of Ukraine to the world, and particularly to developing countries. Maize and wheat accounted for more than 70% of the nearly 8 million tons of grain that left Ukrainian ports under the initiative. Nearly 20% of the wheat exports went to least developed countries (LDCs) with vulnerable populations.
The initiative doubled the amount of wheat shipped to LDCs between August and September – about half a million tons.
But wheat exports to LDCs between January and September 2022 totalled less than 1 million tons. This implied an export gap of 1.2 million tons with respect to 2021. The report said more needs to be done to match previous levels of exports.
Pushing down food prices
Wheat and maize prices are still at historically high levels. This weighs on the affordability of basic foods and poses a risk to food security globally.
This is one more reason why the renewal of the UN-led initiative is important for developing countries, the report says.
The report was produced with contributions from the Joint Coordination Centre for the Black Sea Grain Initiative, comprised of senior representatives from Ukraine, the Russian Federation, Türkiye and the UN, which ensures the safe maritime transportation of grain and other foodstuffs from the three key Ukrainian ports in the Black Sea to the rest of the world.
– global bihari bureau
