The extension of a deal that has allowed Ukraine to ship grain through the Black Sea to parts of the world struggling with hunger is important to keep global food supplies flowing and stabilize markets, according to the United Nations.

In a boost to global food security after Russia's invasion of Ukraine drove up prices, Moscow last week agreed to a two-month extension of the breakthrough accord brokered between the warring sides by Türkiye and the U.N. last summer.

The extension was announced by Türkiye's President Recep Tayyip Erdoğan, who has played an extensive role in negotiating with both sides.

The deal last July came with a separate agreement to facilitate shipments of Russian food and fertilizer that Moscow insists hasn't been applied.

Russia had threatened to bow out if its concerns were not ironed out by May 18. Such brinkmanship isn't new: With a similar extension in the balance in March, Russia unilaterally decided to renew the deal for 60 days instead of the 120 days outlined in the agreement.

Extending the Black Sea Grain Initiative is a win for countries in Africa, the Middle East and parts of Asia that rely on Ukrainian wheat, barley, vegetable oil and other affordable food products, especially as drought takes a toll. In addition, the deal helped lower prices of food commodities like wheat over the last year.

"We don't see prices rising again and hitting the poorest people the hardest," the World Food Programme (WFP) told Anadolu Agency (AA) on Sunday, underlining that the continuation of the initiative was good news for the entire world.

A Joint Coordination Center (JCC) with officials from the three countries and the U.N. was set up in Istanbul to oversee the shipments. More than 30 million metric tons of grain have been transported by more than 950 ships as part of the deal.

Preventing competition

The continuation of the deal is important for the uninterrupted operation of global food supply chains, especially for countries in need, said Eren Günhan Ulusoy, director of the International Association of Operative Millers Eurasia.

There is an expectation of 787 million tons of grain production and 794 million tons of consumption for the 2023- 24 season in the world, he told AA.

He added that Ukraine delivered 30.2 million tons of grain to the world through the grain corridor, underlining that the route would only grow in importance come August-September.

"The grain corridor has been extended three times to date," said Ulusoy, noting that in the last extension, Russia insisted that only 60 days be added to its duration.

"Since Russia's demands to facilitate the export of its grain were not met, each extension further aggravates the conditions for the corridor because Russia saw high wheat production last season and wants to increase its exports to world markets."

At this point, Russia wanted to prevent competition from Ukraine by closing or slowing down the corridor, but its continuation with Türkiye's work and mediation is very positive news for the whole world, he added.

Russia is expected to export more wheat than any country ever has in one year, at around 44 million metric tons, Caitlin Welsh, director of the Global Food Security Program at the Center for Strategic and International Studies, said last week.

Trade flows tracked by financial data provider Refinitiv show that Russia exported just over 4 million tons of wheat in April, the highest volume for the month in five years, following record or near-record highs in several previous months.

Exports since last July reached 32.2 million tons, 34% above the same period from last season, according to Refinitiv.

Welsh said Russia knows that the less grain Ukraine can export, the more it can compensate for the shortfall. And restrictions on Black Sea shipments mean the war-torn country would have to rely more on land routes through the European Union, which has stirred anger from its neighbors.

Curbing wheat price decline

Haluk Tezcan, the Turkish Flour Industrialists' Federation (TFIF) head, said the country's efforts were necessary for the rest of the world, especially nations with difficulties accessing essential food products.

Pointing to the coronavirus pandemic and the Russia-Ukraine war, he said those problems caused price fluctuations and inflation in food.

"With the grain corridor, a serious advantage was gained in terms of product accessibility and price – the price for both underdeveloped and developed countries to reach bread has decreased," he said.

Tezcan stressed that Russia sees wheat as a strategic product and wants to keep prices at a certain level, as is the case with oil, preventing a significant decrease in its price.