UN warns of global food crisis as wheat prices soar

A UN official of the Joint Coordination Centre carries out an inspection on board of the bulk cargo ship TQ Samsun, which traveled from Odessa, Ukraine, loaded with grain, on Monday, July 17, before Russia halted a breakthrough wartime deal that allowed grain to flow from Ukraine to countries in Africa, the Middle East and Asia. Picture: United Nations/AP

The UN has warned of a global food security crisis for millions of the world's poor following Moscow’s withdrawal from a grain export deal.

The warning came as wheat prices surged on global markets and as Ukraine/url]’s southern ports endured a third successive night of Russian aerial bombardment since Moscow's withdrawal from the Black Sea Grain Initiative deal on Monday.

The UN Security Council is due to meet on Friday to discuss the "humanitarian consequences" of Russia’s withdrawal from a deal that allowed the safe Black Sea export of Ukrainian grain for the past year.

Workers load grain at a grain port in Izmail, Ukraine, on April 26, 2023. File Picture: Andrew Kravchenko/AP

The deal, negotiated in July 2022 among Turkey, the UN, and Russia, had allowed grain to flow from Ukraine to countries in Asia, the Middle East, and Africa, where hunger is a growing threat and high food prices have pushed more people into poverty.

But since the collapse of the deal, Ukrainian port cities, including Odesa and Mykolaiv, have been shelled nightly.

The attacks have destroyed critical grain export infrastructure as well as 60,000 tons of grain that was designated for China, and have left more than 20 people wounded. 

In this image provided by the Ukrainian Emergency Service, emergency services work at a scene of a destroyed residential area after a Russian attack in Mykolaiv, Ukraine, yesterday.

Humanitarian aid agency Concern said it is extremely concerned that the ending of the grain deal will impact some of the poorest people in the world, with Lebanon (which received nearly three-quarters of its grain from Ukraine before the war), Pakistan, Libya, and Ethiopia expected to be among the worst affected.

“It will particularly impact countries in Asia and in eastern Africa which are coming out of one of the worst droughts over the last 30 to 40 years,” said a Concern spokesman.

“Some countries in the Horn of Africa were up to 90% reliant on imported grain from Ukraine before the war, so this will have a huge impact on them.

But it will also impact on maize and sunflower oils, which are staple foods in these regions.

“We would call on all parties to get back to the negotiating table and resolve this.” 

Tánaiste calls for deal return

A spokesperson for Tánaiste and Foreign Affairs Minister Micheál Martin, who is in South Africa and Mozambique this week, said Ireland is deeply concerned that Russia has failed to agree to extend the Black Sea grain initiative.

“This initiative has been vital in ensuring that lifesaving grain and other food products from Ukraine continue to reach those countries most impacted by food insecurity, exacerbated by Russia’s war,” said the spokesperson.

“Ireland is clear in our support for Secretary General Guterres and his team in negotiations.  The Black Sea Grain Initiative must continue and be put on a sustainable footing.

“We will continue to show full solidarity with countries in addressing the global consequences of Russia’s war, including food and energy security.”

Markets' reaction

As the grain deal broke down, wheat prices on the European Stock Exchange soared by 8.2% on Wednesday from the previous day, to €253.75 per tonne, corn prices were up 5.4%, and US wheat futures jumped 8.5% — their highest daily rise since just after Russia's invasion of Ukraine in February 2022.

Prices in shops will not immediately increase, but if the interruption in supplies leads to a prolonged period of higher prices, the impact will make itself felt around the world in the coming months, experts warned.

The sharp increase in grain cost after Russia's full-scale invasion of Ukraine last year led to rising prices — not just for food items based on grains, but also for meat and poultry, as animals are often fed with grain.

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In Brussels, the EU's foreign affairs chief, Josep Borrell, condemned Russia's targeting of grain storage facilities.

“More than 60,000 tons [54,431 metric tonnes] of grain has been burned," he said on Thursday.

So not only did they withdraw from the grain agreement ... but they are burning the grain.” 

German foreign affairs Minister Annalena Baerbock said the EU is involved in international efforts to get Ukrainian grain onto the world market.

Meanwhile, Russia has also warned that it will now treat ships heading for Ukrainian ports as potential military targets, while Ukraine said that ships heading towards Russian or occupied ports on the Black Sea could be viewed as carrying military cargo.