• Mon. Jul 22nd, 2024

Food inflation fears rise as Russia backs down on deal

ByETimes

Jul 26, 2023

By ETimes

The Black Sea grain deal which eased food inflation to record highs in 40 years has been put to an end as the concerned parties have not agreed to continue with the pact.
 
Russia at the beginning of the week said it will not extend the international deal to allow the safe shipment of Ukrainian grain through its ports in the Black Sea.
 
The accord, which expired on Monday evening, has been credited with helping curb food prices around the world in the wake of the Russia – Ukraine war last year. The two countries are two of the world’s largest agricultural producers.
 
Almost 33 million metric tonnes of grain have been exported since the Black Sea Grain Initiative was brokered by the United Nations and Turkey 12 months ago.
 
The global food price index compiled by the UN’s Food and Agriculture Organization hit an all-time high in March 2022, but has fallen steadily since then. A drop in food exports caused by Russia’s withdrawal from the deal could put that trend into reverse.
 
As a result of the move by Russia to pull out of a crucial deal allowing the export of grain from Ukraine, wheat and maize prices on global commodities markets jumped.
 
Economist Prof. Tony Hawkins alluded that the collapse of the pact threatens to push up food prices for consumers worldwide and tip millions into hunger.
 
The professor said, “The deal had been ‘critical’ to bringing down food prices around the globe, which spiked after the Russia – Ukraine war in February last year. This sent shock waves across the world and even back here in Zimbabwe as prices soared in two months.”
 
He alluded that the country will need to source blending wheat from other countries such as Brazil that have moved to ramp up soft wheat production and reduce the price effect on our products.
 
Another economist Dr. Prosper Chitambara said not renewing the Black Sea grain deal could cause food prices to again climb but it might be temporary.
 
“However, the worldwide food situation is not as volatile as it was last year because other countries are now producing more grain to counterbalance losses from Ukraine, especially in South America, so the shocks will subside in a few weeks after we realise the situation is not dire,” Dr. Chitambara said.
 
The country seems prepared as it saw record wheat production and increased maize production, which it is saying is sufficient to cover till the end of this harvesting period.
 
“The country has enough grain to cover us till the next harvesting period and as such we are not worried by the disruptions there. We are even currently considering exporting some of our grains to the DRC and all the requests that have come for maize exports are around 350 000 metric tonnes so we do not see a crisis ahead,” said deputy minister for agriculture, lands, water, fisheries and rural development Vangelis Haritatos.
 
However, despite Zimbabwe being out of the woods, most parts of Africa and the Middle East will face difficulties in accessing food according to the United Nations statement on Tuesday.
 
The U.N. World Food Program says grain from Ukraine has played an important role in its efforts to distribute food to those in need. The U.N. agency says the grain initiative has allowed it to ship more than 725,200 tons of grain to relieve hunger around the world, including to Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen – Harare

By ETimes

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