This photo taken on April 2, 2023 shows a view of Istanbul, Türkiye. (Xinhua/Shadati)
Last month, the Black Sea grain deal collapsed after Russia's withdrawal, prompting concerns about the impact on Ukraine's farming industry and global food security.
KIEV, Aug. 5 (Xinhua) -- Last month, the Black Sea grain deal collapsed after Russia's withdrawal, prompting concerns about the impact on Ukraine's farming industry and global food security.
Russia and Ukraine signed separately with Türkiye and the United Nations the Black Sea Grain Initiative in Istanbul in July 2022, which allowed Ukraine to export its grain and other agricultural products from its Black Sea ports. The deal was extended several times.
Experts and local entrepreneurs hope that ways to keep the foodstuffs exports will be found.
POSSIBLE IMPACT
"The closure of the 'grain corridor' dealt a significant blow to Ukraine's export opportunities. It would have consequences on several levels," said Anton Naichuk, head of Ukraine's Civil Diplomacy Fund. Two-thirds of Ukraine's grain and legume exports were supplied through the corridor in the 2022-2023 marketing year, he noted.
The expert also said that the collapse of the deal will reduce Ukraine's budget revenues, cause significant losses to the agribusiness industry, and force Ukrainian farmers to cut next year's harvest.
For local entrepreneurs, the breakdown of the grain deal has affected the functioning of their enterprise.
"There are no big purchases anymore. Companies that buy (grain seeds) at a good price have suspended their work. Meanwhile, the dealers are buying goods at a reduced price," said Mykhailo Semenikhin, chief of a seed-producing enterprise Experimental Base "Dachna" in the Odesa region.
The shutdown of the corridor may also shake the global food market, as Ukraine for years has been one of the key agricultural exporters, producing enough food to feed about 400 million people per year.
The International Monetary Fund has warned that the suspension of the grain deal could push up global grain prices by 10-15 percent.
People walk past a damaged building in Mariupol, Feb. 18, 2023. (Photo by Victor/Xinhua)
ALTERNATIVE ROUTES
Ukrainian authorities have been exploring alternative trade routes for grain export, such as establishing a new "grain corridor" through the territorial waters of Romania, Türkiye and Bulgaria.
"The weak point in this option is that any ship that enters the territorial waters of Ukraine, and it will enter the Ukrainian waters when it sails to ports, can be fired upon by Russia. Russia has warned that it does not guarantee security," Volodymyr Volya, a political expert, said in a Telegram post.
Other options for companies seeking to bring Ukrainian grain to the global market are exports via rail, road and the ports of the Danube River to European countries.
However, a limited amount of grain could be exported through these routes given the shrinking transporting capacities, border crossing issues, and rising prices of such transportation.
"The situation is somewhat complicated by the political situation in the neighboring countries," Naichuk said, noting that Poland, Romania, Hungary and Slovakia have banned the import of Ukrainian agricultural goods until Sept. 15, fearing this could affect their farmers.
A quartet meeting is held by the delegations of Türkiye, Ukraine, Russia, and the United Nations in Istanbul, Türkiye, July 13, 2022. (Xinhua)
CALL FOR SETTLEMENTS
During a phone call on Wednesday, Turkish President Recep Tayyip Erdogan urged his Russian counterpart Vladimir Putin to continue the Black Sea Grain Initiative, saying its long-term shutdown "will not benefit anyone" and the low-income countries in need of grain will suffer the most.
Putin told Erdogan that the extension of the agreement was meaningless without the implementation of the part that concerned Russia and that Russia would return to the deal "as soon as the West fulfills all its obligations" outlined in the agreement.
China's permanent representative to the United Nations Zhang Jun said on Thursday that the Black Sea Grain Initiative and the memorandum of understanding on Russia's grain and fertilizer exports had had a positive impact on maintaining global food security, adding that China hopes that all relevant parties can intensify dialogue and consultation to meet each other halfway, and help restore the package agreement as soon as possible.
"I do not rule out that after some time, in a month or two, Russia will agree to negotiations," Volya said. But the resumption of the deal would depend on the influence of the global community and the situation on the frontline.
Meanwhile, Naichuk said that the issue of the grain deal revival will be discussed during a meeting between Erdogan and Putin slated for later this month.
"Ukraine expects that the Turkish side will make efforts to restore the agreements," Naichuk said, adding that if the deal is revived, Ukraine has prospects to export nearly 50 million tons of foodstuffs this marketing year, which runs from July 1, 2023, to June 30, 2024.■
