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Grain deal extension vital for food security, price stability: Experts

by Daily Sabah with AA

ISTANBUL Oct 19, 2022 - 3:59 pm GMT+3
A crew member gathers grain for analysis in a control created by members of the Joint Coordination Centre (JCC) onboard the Barbados-flagged ship "Nord Vind" coming from Ukraine loaded with grain and anchored in Istanbul, Türkiye, Oct.11, 2022. (AFP Photo)
A crew member gathers grain for analysis in a control created by members of the Joint Coordination Centre (JCC) onboard the Barbados-flagged ship "Nord Vind" coming from Ukraine loaded with grain and anchored in Istanbul, Türkiye, Oct.11, 2022. (AFP Photo)
by Daily Sabah with AA Oct 19, 2022 3:59 pm

As Türkiye focuses its diplomatic efforts on ensuring the grain corridor created with the agreement in Istanbul continues to function, experts and sector representatives emphasize that extending the deal is essential to preventing a possible food crisis and further rises in prices, underlining the importance of delivering new crops gathered under the shadow of war to world markets.

Contacts between parties are continuing on extending the duration of the grain corridor agreement signed between Russia and Ukraine and brokered by Türkiye and the United Nations.

President Recep Tayyip Erdoğan plays the role of "facilitator" between the parties and draws attention to the importance of the issue during his meetings with the leaders of Russia and Ukraine. Speaking recently in Astana, Erdoğan said Ankara is determined to strengthen the Istanbul grain deal and to transport Russian grain and fertilizer to underdeveloped countries.

"We are determined to strengthen and continue the grain exports under the Istanbul agreement and the transfer of Russian grain and fertilizer to less developed countries via Türkiye."

"We may work on determining the name of countries. It is important that we focus on the poor countries rather than developed countries," Erdoğan said.

Türkiye, the U.N., Russia and Ukraine signed an agreement in Istanbul on July 22 to resume grain exports from three Ukrainian Black Sea ports, which paused after the start of the Russia-Ukraine war in February.

Also commenting on the issue, Presidential Spokesperson İbrahim Kalın recently said: "We want this agreement to be extended. We met with the Ukrainian side, they are positive. We are also talking with the Russians. They have some concerns about sending their own crops, ammonia and fertilizers.”

The deal was signed in Istanbul on July 22 and is set to expire on Nov. 19.

Bayram Sade, a member of the Turkish Grain Board, stated that disruptions occurred in the logistics and food supply chain around the world with the Russia-Ukraine war. "While some parts of the world, especially many countries in Africa, are already facing the danger of famine due to drought, the supply of grains, which are basic food products, has been disrupted,” Sade said.

Sade said that the price of bread wheat has significantly increased due to both the COVID-19 pandemic and the war.

“Food security has become the number one problem of countries,” he said.

Noting that some 7 million tons of products have been transported through the grain corridor so far, Sade said it seems unlikely that the 25 million tons of Ukraine's grains from last season will be transported in the time remaining.

“While the extension of the time for this is already seen as a necessity, not being able to transport new season product is also a threat to world food safety and famine,” Sade noted, emphasizing: “It is seen as an absolute necessity for the countries that are suffering in its grip to breathe. For this purpose, the indefinite extension of the grain corridor agreement is seen as the most important way to reduce the food security pressure on the world."

Jakub Korejba, a former lecturer at Moscow State Diplomacy Institute, also said that the agreement continues successfully, adding that in September, Ukraine exported 3.7 million tons of grain and this figure was 2.2 times higher than in August, the first month of operation of the grain corridor.

Pointing out that in total, more grain was exported by sea than all other means of transport during a two-month study, Korejba said, "The dynamics remained positive in October. If it continues like this, it can reach the prewar export figure by the end of the month. The agreement should be extended to avoid price turmoil.”

Korejba also said that the deal is also important for Ukraine’s economy since agriculture is one of the very few of its sectors that still function relatively well.

Korejba warned that failure to extend the deal in the short term would cause a panic that could raise prices in import-sensitive markets.

Emphasizing that this may increase inflation in the medium term, thus deepening social unrest, Korejba said that the key issue in the long run is to stabilize prices and secure shipments without causing political instability and internal turmoil.

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