So, what is the grain deal, and why is it so important to the global food supply chain?
Anna Nagurney is an expert on supply chains, including those involving perishable products like food, and is co-chair of the board of directors overseeing the Kyiv School of Economics in Ukraine. She explains how important Ukrainian grain is to feeding the world—and why the Black Sea is a vital route to getting it to people who need it.
What makes Ukraine such an important part of the global food supply chain?
One key reason for that is Ukraine has approximately one-third of the world’s most fertile soil, which is known as chernozem, or black soil. And before the war, Ukraine was able to rely on its year-round access to ice-free harbors in the Black Sea to ship grains to nearby markets in the Middle East and Africa.
While Ukraine also ships its grain and other food over land through Europe, doing so costs a lot more and takes more time than sea exports. And transportation costs over land were rising because of the war as a result of mines, the destruction of agricultural infrastructure and other challenges.
Why did Russia say it’s pulling out of the deal?
Russia has threatened to exit the deal before, but each time it has chosen to stay in.
But on July 17, 2023, it said it’s unwilling to stay in the deal unless its demands are met to ship more of its own food and fertilizer. Over the following two days, it attacked Odesa with drones and missiles in one of the largest sustained assaults on the port. Russia also said it would deem any ship in the Black Sea bound for a Ukrainian port to be a legitimate military target.
While Russia has extended the deal after previous threats, this time may be different. Russian strikes caused extensive damage to Odesa, which may severely limit Ukraine’s ability to export through the port in the future —deal or no deal.
I believe Russian leader Vladimir Putin is weaponizing food at a time of growing hunger. I only hope goodwill prevails and somehow Ukraine’s vital exports are allowed to continue.
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