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Market Chaos, Food Shortages Expected as Russia withdraws From Grain Deal

By Belal Awad · July 22, 2023

Zaporizhzhia Oblast agricultural region in Ukraine after Russian shelling.  Wikimedia Commons

Russia shocked the world with this week’s announcment that it would end its participation in the Black Sea Grain Initiative, a deal brokered between Russia and Ukraine by the United Nations and Turkey. The pact has been central in maintaining global food security since Russia’s 2022 invasion of Ukraine. The agreement allowed Ukraine to export its grain by sea, avoiding Moscow’s naval blockade, in order to supply world markets with millions of tons of food supply.

Disrupting Ukraine’s ability to export grain will cause severe food shortages in some of the world’s poorest regions while threatening to destabilize global food prices. Russia’s withdrawal from the grain deal will likely have far-reaching implications, especially natons on the brink of famine, including Ethiopia, Yemen, Afghanistan, Sudan, Somalia, Kenya, and Djibouti.
Discussing Russia’s withdrawal on Al Jazeera, several experts suggested that Russia’s termination of the deal may have been a direct snub aimed at Turkey President Erdogan, who played a key role in facilitating the deal, providing a corridor for grain shipments through the Black Sea despite Russia’s naval blockade. By withdrawing from the initiative, Russia might have intended to signal that it still holds the upper hand in the region. Rich Outzen, Senior Fellow Atlantic Council told Al Jazeera that one purpose of the withdrawal is “to express displeasure with something that President Erdogan clearly has had as an accomplishment.” Even so, experts believe Erdogan still has the potential to persuade Putin to resume the grain deal, especially in light the humanitarian concerns.

Russia’s stated reasonining for its decision to withdraw is that it has been unable to export its own foodstuffs as a result of the deal and Western economic sanctions implemented since the start of the war.

Outzen explained that “the primary purpose is to put pressure on sanctions relief… Russia exported a record amount of cereal grains last year. So clearly, Russia is still able to get its grain out. The idea that somehow this deal has prejudiced the Russian ability to export grain is just false.”

Helin Sari Hertem. Associate Professor at Istanbul Medeniyet University, believes the motivation behind the withdrawal is also heavily political, telling Al Jazerra: “I think especially after last week’s NATO summit and the consolidation over there, Russia is feeling much more pressurized, and the Western world is talking about giving new types of weapons to Ukraine, and there is full military support. They are talking about cluster bombs. And since the very beginning… people were not sure about Ukraine’s military position. But… now Ukraine is… there. It’s strong.”

The deal had helped reduce food prices by more than 23% since March 2022. Its collapse threatens to reverse those gains. Experts believe pragmatism will eventually prevail, leading to the resumption of the grain deal under a different name or agreement. Despite the geopolitical maneuvering, the grain deal has symbolic significance as it demonstrates the capacity for internatonal cooperation even during times of war.

Light Wave commentary

The story illustrates the interplay of geopolitics, economic interests, and humanitarian concerns. The struggle for control over the grain deal reflects broader geopolitical tensions, but it also presents an opportunity for dialogue and cooperation. Presumably Russian President Putin will find a way to reconstitute the grain agreement. Should he not be able to find a way, then the broken agreement will serve as one more reason for the international community to seek the demise of the cold-blooded despot.