What's keeping Russia-Ukraine grain deal afloat despite Putin's quibbles?

In the midst of the carnage brought about by the Russia-Ukraine war, one must wonder how the United Nations-brokered Black Sea Grain Initiative – recently renewed for another 60 days – is holding its own, while both sides are bathing in bloodshed every day.

Let's take a step back and have a look at some of the events that transpired last summer.

By mid-2022, the Ukrainians were facing the full brunt of the Russian military might. Critical infrastructure suffered from relentless attacks by Russia's aerial bombs, artilleries and missiles. Ukrainian sea routes across the Black Sea were littered with explosives, making it almost impossible for cargo ships to carry food to the rest of the world. This broke the back of Ukraine's farming sector as over 90% of the country's agricultural exports go through Black Sea ports.

With crucial grain supply lines across the Black Sea choked, the rhetoric on global food insecurity began to hold its ground. No thanks to the Russian invasion, people in the far corners of the earth realized Ukraine's vital role in feeding the world.

The East European agricultural powerhouse typically accounts for over 40% of global sunflower oil exports, 20% of corn exports and over 10% each of wheat and barley shipments. The UN's World Food Programme receives nearly 40% of its wheat from Ukraine and feeds the poorest of nations, including Ethiopia, Yemen and Afghanistan.

But it's not as if the Russian invasion of Ukraine suddenly unleashed all fury on the world's millions of poverty-stricken populations. This potential calamity has been simmering for a while, with drought across key agricultural regions in the world since 2020, coupled with disease and misery transmitted through COVID-19, already challenging the poorest of nations. The Russia-Ukraine war was perhaps the last key in unlocking the Pandora's box of historic famine.

The UN foresaw a catastrophe-in-the-making, with nearly 400 million people depending on food supplies from Ukraine. So, before things went out of control, the UN and Turkey brokered a historic agreement with Moscow and Kyiv on July 22, 2022. Under an initial four-month deal, popularly known as the Black Sea Grain Initiative, Russia had to ensure safe passage for grain shipments from three major Ukrainian ports in the Black Sea: Odessa, Chernomorsk and Yuzhny.

Despite Moscow's reservations, the grain corridor pact was extended for another 120 days in November. Since then, there have been a few noises of discontent on the grain corridor deal from Kremlin, which were making another extension very speculative. However, the UN buried all rumors when it announced March 13 that the Russian Federation has agreed to extend the Black Sea Grain Initiative for another 60 days.

"The Black Sea Grain Initiative, alongside the Memorandum of Understanding on promoting Russian food products and fertilizers to the world markets, are critical for global food security, especially for developing countries," the UN said.

Is the grain-corridor deal a success so far?

Numbers don't lie: the Black Sea deal has delivered better-than-expected results for Ukrainian farmers who were staring at nothing but despair after the invasion.

"The Black Sea Grain Initiative has allowed the exports of 24 million mt of grains and over 1,600 secure vessel voyages through the Black Sea with 55% of food exports going to developing countries," the UN said. "The FAO Food Price Index has decreased for 10 consecutive months since reaching record high levels in March 2022, clearly demonstrating the positive impact of both agreements on global food prices.".

The continuation of the Black Sea Grain Initiative is crucial for global food security, as grain and fertilizer prices and availability have not returned to pre-war levels, causing hardship particularly in developing countries, the UN said.

The China-Turkey factor

The UN can claim all day long that the Black Sea agreement is specifically aimed at ensuring food supplies to poor countries, but statistics tell a slightly different story. Going by data estimates of the UN itself, Beijing and Ankara are the biggest beneficiaries of the grain corridor deal, along with Spain, the Netherlands, Italy, Portugal, Israel and Belgium.

Since the inception of the Black Sea deal on Aug. 1, 2022, China has purchased 6 million mt of grains from Ukraine, while Turkey has bought 2.7 million mt. It's not surprising that both nations, who are very close allies of Russia, have vested interest in the continuation of the Black Sea Grain Initiative.

Turkey, which suffered colossal damages from earthquakes in February, urgently needs to feed its displaced citizens. China, meanwhile, wants to ensure food security for its 1.4 billion population. Isolated by the West and hit with strict economic sanctions, the Kremlin wouldn't want to upset two of its closest allies.

So, while Putin can keep complaining that the Black Sea Grain Initiative is primarily serving the rich nations, the deal looks steady for now, with China and Turkey firmly onboard.