Russian grain lobby says Kyiv’s attacks threaten Black Sea exports, global food security

MOSCOW - Russia’s main grain lobby group warned on July 31 that Ukrainian drone attacks on Russian ships and ports could shut down grain exports via the Black Sea in the near future, pushing up prices and causing hunger in Africa and the Middle East.

Russia, the world’s largest wheat exporter, and Ukraine, also a major agricultural exporter, have been attacking each other’s agricultural export facilities and commercial vessels in the Black Sea area in recent weeks.

Concerns over supplies from the Black Sea have driven wheat prices higher in recent weeks as Russia and Ukraine have stepped up their attacks.

Russia’s Union of Grain Exporters and Producers told Reuters that the consequences of the Ukrainian attacks would be felt by many countries soon.

“The disruption to shipping in the Black Sea caused by Ukrainian attacks on dry cargo vessels and port infrastructure poses a direct threat to global food security,” the union said in a statement to Reuters.

“Although importers have not yet faced a grain shortage, thanks to existing carry-over stocks and the temporary ability to meet demand through other suppliers, the consequences of this crisis will soon affect many countries.”

An agricultural market source told Reuters on July 30 that a Ukrainian drone attack had inflicted “significant damage” on a major grain export terminal at Russia’s port of Taman.

What it called Ukraine’s “systematic attacks” - which began in July - could soon lead to “a complete blockage of export corridors in the Black Sea basin,” the Russian grain union warned.

Ukraine’s largest farming union, UAC, has also warned in recent weeks that Russian strikes on shipping near the southern port of Odesa were restricting Ukrainian exports in the key harvest period and could impact global food supplies.

Russia’s Ministry of Defence said on July 31 that its forces had struck 31 ships linked to the Ukrainian military in the past week, including 23 cargo ships and four bulk carriers.

Ukrainian President Volodymyr Zelensky said on July 31 that Russian attacks on shipping in the Black Sea were threatening global food security, and urged European partners to help combat this.

A grain corridor, brokered by the United Nations in the months following the start of the full-scale war in February 2022, allowed Ukraine to export along the western part of the Black Sea, but has effectively been shut in recent weeks by Russian attacks.

A Ukrainian government source told Reuters last week that US and Ukrainian officials were discussing the possibility of an air ceasefire as part of peace proposals to take to Russia. The Kremlin said it was premature to comment on such reports.

‘Protracted crisis’

Russia’s Union of Grain Exporters and Producers warned that the shortfall in supply of Russian wheat to other countries this season could reach 30-35 million metric tonnes, accounting for around 15 per cent of total global wheat trade. It would not be possible to cover the shortfall by increasing exports from alternative countries, the union predicted.

“A physical shortage of grain will trigger a protracted global crisis,” it warned.

“If current negative factors persist, the FOB (free-on-board) price of wheat can be expected to rise to between US$340 and US$370 per tonne, with the prospect of it exceeding US$400. Such a trend will trigger a wave of widespread food inflation, the scale of which may exceed that caused by logistical disruptions during the pandemic.”

It said the Middle East and Africa were most at risk from the fallout of the crisis since they depended on supplies from the Black Sea basin.

“As wheat prices rise, not all importing countries will have the economic capacity to maintain their purchasing volumes, which could lead to a significant decline in domestic consumption. In the poorest countries, this will trigger famine.” REUTERS