The Black Sea Grain Initiative

Syllabus: General Studies Paper 2

Russia has re-joined the Black Sea Grain deal. The Black Sea Grain deal endeavours to tackle escalating food prices emanating from supply chain disruptions because of Russia’s actions in the world’s ‘breadbasket’. 

What is the Black Sea Grain Initiative?

• The Black Sea Grain deal endeavours to tackle escalating food prices emanating from supply chain disruptions because of Russia’s actions in the world’s ‘breadbasket’. 
• The deal, brokered by the UN and Turkey, was signed in Istanbul on July 22 this year. 
• Initially stipulated for a period of 120 days, with an option to extend or terminate after November, the deal was to provide for a safe maritime humanitarian corridor for Ukrainian exports (particularly for food grains) from three of its key ports, namely, Chornomorsk, Odesa and Yuzhny/Pivdennyi. 
• The central idea was to calm markets by ensuring an adequate supply of grains, thereby limiting food price inflation.
• Ukraine is among the largest exporters of wheat, maize, rapeseed, sunflower seeds and sunflower oil, globally. 
• Its access to the deep-sea ports in the Black Sea enables it to directly approach Russia and Europe along with grain importers from West Asia and North Africa. 
• Russia’s actions in the East European country had disturbed this route which earlier used to ship 75% of its agricultural exports — precisely what the initiative sought to address.

Why is it important?

• As per the UN Office for Coordination of Humanitarian Affairs, approximately 10.1 million tonnes of grains have been shipped since the initiative commenced. 
• The UN Food and Agricultural Organisation’s (FAO) Food Price Index, which assesses the monthly change in international prices of a basket of food commodities, fell for the sixth consecutive month in a row during the September assessment period. 
• It was earlier inferred that the supply situation in markets was seen to be easing, with potential for further price drops. 
• People hoarding the grain in the hope of selling it for a sizeable profit owing to the supply crunch were obligated to sell. The initiative has also been credited for having made a “huge difference” to the global cost of living crisis.
• About 44% of the shipments, which include corn, wheat, rapeseed, and sunflower oil among others, reached high-income countries (including Spain, Netherlands and Italy among others), 28% reached low and lower-middle-income countries (Egypt, Iran, Sudan and Kenya among others) and 27% reached upper-middle income countries (China and Bulgaria among others).

Current status of the Black Sea Grain Initiative

• Black Sea Grain deal set to expire on November 19, 2022.
• The renewal negotiations were led by the United Nations throughout October 2022.
• However, Russia pulled out of this agreement on October 29 due to drone attack on its naval ships in the port of Sevastopol.
• Despite Russia withdrawing from the deal, several grain ships continued to depart from ports in Ukraine with support from Turkey and UN.