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Grain Prices Rise After Russia Terminates Ukraine Export Deal

Russia’s disruption of Ukraine’s grain exports exacerbates hunger in some countries facing shortages, though as long as grain prices remain relatively stable, the crisis is unlikely to become catastrophic in the short term, aid officials said on Thursday.

Moscow this week terminated a deal under which Ukraine, one of the world’s major grain producers, was able to export its food crops in the face of an effective blockade of its ports by Russia’s Black Sea Fleet.

For a year, the agreement had helped to stabilize grain prices and to ease a global food shortage. But the deal’s end has already caused grain prices to rise again and there is little doubt it will continue to create instability in grain markets and supply, aid officials said.

“This is something which is going to further disrupt markets,” said Arif Husain, the chief economist of the United Nations’ World Food Program. “That is what is troublesome.” He said it would compound problems for countries whose economies are still recovering from the coronavirus pandemic.

Grain prices rose sharply on Wednesday, but not to the high levels seen at the start of Russia’s full-scale invasion nearly 17 months ago. Mr. Husain said that even if grain prices did not soar, countries in the Middle East and Africa would have to pay increased shipping costs from grains sourced from farther afield than Ukraine, and shipping times would also increase.

Still, there are other countries producing grain and the flow of Ukrainian grain is not the only factor affecting prices. Others include climate and harvests in other countries, including Brazil and Russia, said David Laborde, the director of the Agrifood Economics division at the U.N.’s Food and Agriculture Organization. Brazil exported more than twice the amount of corn than Ukraine under the deal, he added, and Russia’s wheat harvest last year was strong.

“We have other countries in the world that are ready to sell,” said Dr. Laborde.

Arnaud Petit, executive director of the International Grain Council, an intergovernmental body, said that, while the week’s events would “add some pressure on the markets,” prices would not likely return to the levels seen 17 months ago.

Shashwat Saraf, the International Rescue Committee’s East Africa regional emergency director, said the halt to Ukrainian grain exports via the Black Sea hit some countries harder than others because they were already facing a serious problem with hunger. He pointed to Somalia and South Sudan in East Africa as examples, saying nearly 50 million people in the region were “extremely food insecure.”

He said the disruptions were “an aggravating factor which would increase vulnerability” for people who had already lost their livelihoods, had been forced to flee their homes and who were, in some cases, already dependent on aid assistance.

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Mohammad SHiblu

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