The first shipment of Ukrainian grain since the Russian invasion in February left the port of Odesa under a landmark deal to lift Moscow’s naval blockade in the Black Sea. The 26,527 tons of grain on board the Ship Razoni, which is registered in Sierra Leone, will be delivered to the port of Tripoli in Lebanon after passing via the Bosporus strait.

This has to be attributed to the agreement reached by Ukraine and Russia on July 22,  which allows exports of grain and other agricultural products to resume from selected Ukraine Black Sea ports after months of Russian blockade. The deal comes at a time when storage capacity has reached its limits and the world food and fuel prices are going leaps and bounds. “A beacon of hope and relief”, is how United Nations (UN) Secretary-General Antonio Guterres described the agreement that paves the way for the export of Ukrainian grain. The two countries signed separate agreements with Turkey and the UN to unblock grain shipments from Ukrainian ports, which are estimated to hold more than 20 million tons of grain. The implementation of the agreement is hoped to bring much-needed stability and relief to global food and energy security, especially on the most vulnerable humanitarian ground. The world has already started to witness the benefits of the grain agreement. With the mobilization of approximately 20 million tons of grain from the Black Sea, the wheat prices started to go downward simultaneously in global and local markets. More than 130 cargo ships loaded with Ukrainian grain are waiting in the Black Sea to pass into the Danube and have access to the global markets resulting in an easing of the food crisis. Ukraine has already called for extending other products under this agreement. Therefore, this grain deal can be perceived as a major diplomatic breakthrough aimed at abating the global conflict situation that is expected to improve the situation from further deterioration

What’s in this Deal?

The deal, which comes after several weeks of difficult negotiations between Moscow and Kyiv with Ankara and the UN as mediators, has a duration of 120 days, (approximately four months). Two different agreements are incorporated in the accord to resume Black Sea exports: one between Russia and Turkey covering food and fertilizer shipments from Russia, and one between Ukraine and Turkey covering grain exports from Ukraine. Export ships would be permitted safe passage from the ports of Odesa, Chornomorsk, and Pivdennyi under the terms of the Ukraine deal. As part of its agreement with Turkey, Russia is guaranteed that export sanctions will not have an impact on its exports of food and fertilizer. A coordination and monitoring center made up of UN, Turkish, Russian, and Ukrainian officials will be established in Istanbul to monitor the situation and make sure that both parties adhere to the deal. Once the agreed timeframe has been reached, the pact could be renewed if both sides agree.

Why is this Deal Significant?

The agreement has paramount significance in the context of global food and energy security. The talks come at a time when food prices around the world are hitting record highs due to the conflict in Ukraine. Over the past 30 years, the Black Sea region has emerged as an important global supplier of grains and oilseeds, including vegetable oils. Ukraine ships almost 75% of its agricultural exports through the ports on the Black Sea. About half of those exports go out through the ports of Odessa, Chornomorsk, and Pivdennyi. Hence, the strategic location of the Black Sea port is very crucial in terms of maintaining the global food supply chain. On the flip side, Ukraine and Russia are the world’s largest grain suppliers, and on which 30% of wheat exports from more than 30 countries depend, according to the UN’s Food and Agriculture Organization (FAO).  Owing to the Russian blockade of Black Sea ports, a large amount of wheat was stuck in Ukraine, pushing up the world’s grain prices. Food security concerns, therefore, rose, especially in developing countries like India, Bangladesh, Sri Lanka, and Pakistan. If the Russia-Ukraine grain agreement is put into effect properly, it might lower the cost of basic food staples and relieve food shortages in nations that are highly reliant on Ukrainian supplies.

Another important thing is, that the grain agreement is a sign that dialogue between the parties is possible in the search to abate human suffering. This deal is a paramount important development as it led Ukraine with its allies one step ahead toward peace.  The positive implications can be noticed with the decline of wheat prices in both the international and local markets, which threatened the world severely during the war.

Process of Alleviating Global Food Crisis

The grain agreement is perceived as the beacon of hope by the world as the agreement could help to alleviate rising food insecurity and global hunger concerns. The Turkish leader Recep Tayyip Erdogan referred to the agreement as “a new turning point that would revive hopes for peace”. Russia and Ukraine agreed to restore blocked grain stockpiles to avert a global crisis that has put tens of millions of people, mainly in Africa and the Middle East, at risk of severe hunger and famine. The benefits of the pact will be witnessed by everyone in the world, especially the developing countries. Two significant developments would result from the release of all that grain: it would enhance food supplies for Ukraine’s steadfast consumers and lower costs for necessities by increasing supply.

While the Western sanctions were pernicious to Russia, they also increased the price of food and energy globally, which is particularly deleterious to emerging nations. The UN World Food Program estimates that about 4.5 million tons of grain intended for export are still stalled in Ukrainian ports alone as a result of the conflict. Hundreds of millions of people in the Middle East and North Africa (MENA) region and elsewhere depend on Black Sea wheat imports as an essential part of their diets and are contending with high prices. For the neighboring nations who have relied on the food supply network that starts in those Black Sea ports for years, the grain stranded in Ukraine is very significant. For instance, Egypt is still waiting on the 300,000 tons of Ukrainian wheat that were scheduled to arrive in February and March. The agreement aims to permit the export of an additional 5,000,000 tons. Other Middle Eastern and African nations are also experiencing food scarcity, including Lebanon, which imported 60 % of its wheat before the conflict from Ukraine. The loss of Ukrainian grain has adversely affected Somalia, one of Africa’s poorest nations. Before the war, Somalia, which had been struggling for years to feed itself, imported more than half of its wheat from Ukraine.

The hope is that by releasing the grain, these and other short-term shortages can be alleviated. Meanwhile, allowing Russia to resume fertilizer exports is not just a sop to Moscow, it will also help farmers around the world, in countries as far away as Peru, which last year relied on Russia for 70 % of its fertilizer supplies. The implementation of the agreement, as well as the mere possibility of the grain’s release, caused a decline in worldwide wheat prices as traders took into account the entry of Ukrainian grain onto the international market. It is hoped that prices will settle at a lower level if the embargo were to end and those 20 million tons departed Ukrainian ports, increasing access to food for millions of people. In the beginning, 30,000 metric tons of wheat were going to be purchased, loaded, and shipped out of Ukraine on UN-chartered vessels by the World Food Program. A significant link in the global food supply system, Russian grain shipments, will be made easier by the agreement.

Hence, the implementation of this grain agreement hopes to bring about worldwide positive impacts, especially in the food systems. Moreover, it has unfolded possibilities of peace talk between Russia and Ukraine which can bring a peaceful solution to the Ukraine crisis in the long run. Apart from being a pragmatic decision taken by Russia and Ukraine to resolve the food crisis, the deal is a monumental development that has taken place amid the Ukraine crisis.