Russia’s halting the Black Sea Grain deal again threatens global food and fertilizer prices, as the war in Ukraine grinds on.
The Black Sea Grain Initiative has been a global food and fertilizer lifeline for nearly a year, but Russia says ‘not yet’ to extending it again, after a previous extension ran out.
USDA Chief Economist Seth Meyer told this year’s Ag Outlook Forum, ending the deal would be a blow to Ukraine and the world. Meyer said, “My concern would be, if the Black Sea Grain Initiative does not continue, they will have to rationalize production further down. The Black Sea Grain Initiative is serving a very important purpose to get that product out and to moderate global grain prices.”
Key for developing countries in Africa and the Middle East, where food costs first soared when war broke out.
The UN reports more than 32 million tons of food commodities have since gone from three Ukrainian Black Sea ports to 45 countries, moderating record food prices before the initiative.
Meyer added, “Before the initiative, very little grain moving, some of it moving overland at very high costs, and then it’s switching to the Black Sea Grain Initiative. The Black Sea Grain Initiative has been really critical for those folks in Ukraine to achieve grain exports.”
The State Department said in March, world wheat and fertilizer prices spiked nearly 30 percent, in the immediate aftermath of Russia’s full-scale invasion.
And it dismissed Russian claims being made again now, that sanctions were holding back Russian grain and fertilizer exports, arguing those items are exempt.