'Lifeline' cut off: Russia pulls out of Black Sea Grain Deal

The Black Sea Grain Initiative allowed the U.N.’s World Food Programme (WFP) to transport more than 725,000 metric tons of wheat to help people in need in Afghanistan, Ethiopia, Kenya, Somalia, Sudan, and Yemen. Ukraine supplied more than half of WFP’s wheat grain in 2022, according to the United Nations. Image credit: WFP

Date Posted: July 18, 2023

Jon Adamy, Michigan Farm Bureau

The landmark agreement that allowed for the safe passage of Ukrainian grain through the Black Sea has come to an end, less than a year after it started.

Russia officially pulled out of the Black Sea Grain Initiative on Monday, marking the closing of a tumultuous and tense deal that came down to the wire multiple times to be extended. Wheat markets reacted sharply to the news, spiking quickly before normalizing — and even falling slightly — within a few hours.

Chart depicting declining wheat prices in September 2023 with a slight uptick at the end of the month.

The initial agreement — brokered by Turkey and the United Nations — was signed on July 17, 2022. More than 32 million metric tons of food commodities were exported from three Ukrainian Black Sea ports to 45 countries across three continents during that time, according to the U.N., which called the deal a “lifeline for global food security.”

“The cancelation is not likely to have a huge immediate effect, since exports under the program had already fallen to minimal levels in anticipation of cancellation by Russia,” said Loren Koeman, lead economist for the Michigan Farm Bureau.

“The agreement’s end is unfortunate as it will keep upward pressure on food prices worldwide, with the largest effect on those that can least afford it — Ukrainian farmers and food insecure countries.”

For more details and coverage of the agreement, please see the Michigan Farm News story.