The Kremlin diet

How Russia blackmails the whole world with hunger and why the grain deal is still under threat: Novaya Gazeta Europe takes a close look

The Kremlin diet
Photo: Getty Images

The war between Russia and Ukraine has caused food prices to soar globally, hitting the highest numbers in the past 30 years. The grain corridor, established in accordance with the Black Sea Grain Initiative, helped stabilise the prices, as Ukraine (one of the largest wheat exporters) has managed to export 10 billion tonnes of grain from its blocked ports since 1 August. Putin uses the grain deal as a leverage to put pressure on the rest of the world: Moscow repeatedly threatened to quit, delayed ship inspection, and recently underlined that it reserves the right to not ensure security of the grain corridor beyond 19 November, the date when the deal expires. Our data research covers how the Kremlin is threatening the world with hunger and what will happen to the grain exports next.

Ukraine’s seaports were placed under a military blockade after the war broke out. Exports from the country that produces 10% of the globally consumed wheat and 15% of corn came to a grinding halt. Around 18 million tonnes of last year’s harvest were stuck in grain storages.

Food prices immediately spiked already in late February and reached record levels over the past 30 years in March. According to UN estimates, 47 million people found themselves on the brink of hunger.

In July, Russia ultimately went for the grain deal, albeit under the UN pressure. The four sides — the UN, Russia, Ukraine, and Turkey — agreed to establish a safe naval passage for grain-loaded ships leaving three Ukrainian ports for 120 days. The deal included a provision allowing its automatic extension.

The grain prices started to calm down already in mid-May, dropping about a quarter of the value by July: from 400 to 300 index points according to the International Grain Council.

“Prices began falling already in May. One of the factors driving the drop was not the deal itself but its anticipation. Because the market forms prices by focusing on future events, not the past,” agricultural sector expert Andrey Sizov commented.

According to the UN data, the lower basic food prices that reduced as a result of the deal saved approximately 100 million people from extreme poverty.

In August-October, more than half of the grain stock that stood at 18 million tonnes was successfully shipped out of the country, while the export level in October almost reached the pre-war levels.

What went wrong

By inking the grain deal in July, Russia acquired a leverage tool allowing Moscow to influence food prices and the international community as a whole by blackmailing the world to quit the deal.

Russia first started mentioning its potential withdrawal in September already. Moscow’s UN envoy said that the Kremlin was expecting sanctions limiting Russian grain exports to be lifted, while Russian President Vladimir Putin speculated about re-imposing seaport blockades.

On 12 October, Russia threatened the deal once again, sending a letter to UN Secretary General Antonio Guterres with demands to approve exports of Russian grain and fertilisers. “We are not against deliveries of grains but this deal should be equal, it should be fair,” Russian’s UN mission chief in Geneva told Reuters.

Ship inspections in Turkey also started to take longer in the meantime. According to the agreement, an international inspection was supposed to check each vessel to make sure that unauthorized cargo and people were not on them. In August, it took about 3 days on average to inspect one vessel, while this number jumped to 9 days in September, and rose even more in October, more than 13 days.

Timeline of how timeframes for inspection of ships sailing from Ukraine increased

Average number of days between the ship departure and the end of inspection in Turkey

Source: UN

In the morning of 29 October, Ukraine attacked the Russian Black Sea Fleet in Crimea’s Sevastopol. In response, Moscow finally snapped and quit the deal 20 days before its expiry date. Putin accused Kyiv of abusing the grain passage to attack ships in Sevastopol. Grain prices immediately went up.

However, Russia’s move did not affect the grain ship navigation in the Black Sea despite Moscow’s intentions. On 31 October, record-breaking shipments equalling 354,000 tonnes left Ukrainian ports. On 1 November, Turkish leader Recep Tayyip Erdoğan said that the Ukrainian grain exports would not be interrupted despite Moscow’s withdrawal.

On 2 November, Russia agreed to resume operation of the grain corridor. In reality, supplies were never halted.

Will the blockade be reimposed?

The grain deal runs through 19 November, its signatories will still have to negotiate any extension.

Russia has warned that signing the deal without Russia’s participation will not guarantee security of the passage. The next stage of escalation — if it ever comes down to it — is a direct clash between Russian and NATO ships or an attack on a civilian cargo vessel. Otherwise, Russia will lose its leverage on the food market.

“The likeliest thing now is that the ships that are already in the Black Sea sail out. There were about 100 of them as of the end of last week. It remains to be seen what comes next,” Andrey Sizov explains.

The UN forecasts that people will eat fewer grain products in 2023 for the first time in two decades. Poorest regions are most at risk. The EU, the UN, and NATO are all issuing warnings that a disruption of wheat exports will not only push global prices up but will also cause a food crisis in hunger-prone countries.

Moreover, Ukraine also needs the grain deal because the country’s GDP plummeted in 2022, losing 30%. Last year, Kyiv received $10.5 billion in 2021 for wheat and corn exports. This year, the same exports boosted the volume of Ukrainian exports to record levels since the war began.

Ukraine can also free up storage space for the coming harvest by exporting what it has in silos now. According to current forecasts, it will exceed 53 million tonnes of grain, three times the size of the country’s domestic demand. However, analysts say that the Ukrainian exports will not be able to reach pre-war levels in 2023, while wheat and corn will continue to pile up in storages.

Supplies cannot be redirected via land routes. Before the war, Kyiv exported 90% of grain by sea, which Andrey Sizov says is much quicker and cheaper.

“The Russia-standard gauge is one of the main obstacles. Its width differs from the European standards. You cannot load train cars in the Odesa region and send them to Romania: you will either have to change trains on the border or refit wheels. It is very time consuming. Land supplies are going ahead, but it’s not possible to add more.”

According to Sizov, all major grain exporters benefit from the Ukrainian ports being blocked. The Russian wheat is the main competitor for the Ukrainian grain, as its share of the global market stands at 18%.

Amid record-breaking harvest expectations, prices for the Russian wheat are the lowest in the Black Sea region. And even though the number of exporting companies who are willing to work with Russia has halved, analysts predict that the wheat exports from Russia will reach pre-war levels next year.

Editor in chief — Kirill Martynov. Terms of use. Privacy policy.