(CMR) Russia is refusing to extend a deal that has allowed Ukraine to export grain and other food items during the ongoing invasion. If Russia is successful in preventing Ukraine from exporting, this could see prices soar across the world.
The Black Sea Grain Initiative, an agreement backed by the United Nations, allowed Ukraine to ship corn, wheat, barley, and other food products from three designated ports in Ukraine.
According to NPR, before the deal was put in place last July, a Russian naval blockade of key Ukrainian ports prevented key exports such as wheat and sunflower oil from reaching world markets, causing prices to soar.
On Monday, wheat future prices were rising by 3.5% to $6.84 a bushel in Chicago, according to NPR.
Experts say the deal has helped stave off a worsening of global hunger and prevented a surge in food prices worldwide. U.N. Secretary-General António Guterres reportedly called the deal “a beacon of hope” when it was signed last summer.
NPR reported that Moscow has been unhappy with the deal since its inception, saying that it failed to deliver on a promise to free up Russian agricultural exports that have been blocked by Western sanctions. While food and fertilizers are not under sanctions, Russia said sanctions-related banking, transit, and insurance restrictions make trade untenable.
In a press conference Monday, the U.N.'s Guterres said Russia's grain trade had “reached high export volumes,” and its fertilizer markets were “stabilizing” under policies laid out in a memorandum of understanding between the U.N. and Russia last July.
Guterres said the U.N. reportedly sent a letter to Putin last week with new proposed measures to address Russia's complaints, including allowing a subsidiary of the Russian Agricultural Bank to reconnect to SWIFT, the world's dominant financial messaging system.