July 26, 2023


Russia's exit from Black Sea grain deal may raise Asian food prices




Analysts predict that Russia's withdrawal from the Black Sea grain deal could lead to higher food prices in Asia, but the immediate impact is expected to be limited due to reduced imports from Ukraine and increased supply from other countries, Al-Jazeera reported.


Under the Black Sea deal, Asia imported 46% of grain and foodstuff shipments, while Western Europe and Africa accounted for 40% and 12%, respectively.


China emerged as the largest recipient of exports, taking 7.7 million tonnes, or nearly a quarter of the total, as per UN figures. These imports include 5.6 million tonnes of corn, 1.8 million tonnes of sunflower seed meal, 370,000 tonnes of sunflower oil, and 340,000 tonnes of barley.


Oksana Lesniak, head of the Asia-Pacific Bureau at the Centre for Global Studies Strategy XXI in Kyiv, noted that around 30% of China's corn imports originate from Ukraine, serving various purposes, including food, cooking oil, and animal feed.


Pavlo Martyshev, a researcher at the Centre for Food and Land Use Research at Kyiv School of Economics, said that while the end of the grain deal might impact food security in Asia by driving up grain, oilseed, and vegetable oil prices, the region is better positioned to handle the situation compared to regions like Africa.


Martyshev reassured that Asian countries, including China, possess the financial capability to maintain sufficient food supply despite potential price increases, which may not be the case for some African nations.


He also mentioned China's proactive approach to diversify its imports, as evidenced by a 2022 agreement with Brazil to import corn. This diversification strategy ensures a degree of food security since Brazil is currently experiencing exceptionally high harvests.


Martyshev cautioned that global grain prices are expected to rise in the coming months due to the collapse of the deal and other factors like extreme weather conditions attributed to climate change.


At present, the impact on food prices remains subdued as northern hemisphere countries are harvesting new crops, ensuring adequate grain supplies for all.


-      Al-Jazeera

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