Russia Ends Grain Deal: Food Prices To Rise Globally

Russia announced the suspension of a humanitarian corridor to supply crucial Ukrainian commodities to global markets, only hours before the agreement’s expiration, on Monday, July 17.

The U.N.-brokered Black Sea Grain Initiative, first approved in July 2022, has been periodically extended in the past, but Russia claims the contract has restrictions that impede the full dispatch of its own grain and fertilizer shipments.

The UN initiated the plan to avert a worldwide food disaster when Moscow launched a full-scale invasion of fellow vital grain suppliers and neighbour Ukraine.

It will conclude on Monday, July 17 at midnight, Istanbul time.

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“The Black Sea agreements ceased to be valid today. As the President of the Russian Federation said earlier, the deadline is July 17. Unfortunately, the part relating to Russia in this Black Sea agreement has not been implemented so far. Therefore, its effect is terminated,” Kremlin spokesperson Dmitry Peskov said, according to Russian state news agency Tass on Monday.

The report caused a 3.5% increase in wheat prices.

Tass quoted Russian Foreign Ministry spokeswoman Maria Zakharova as saying that Moscow has publicly said that it opposes expanding the project, notifying Ankara, Kyiv, and the UN secretariat.

The grain agreement permitted the export of ammonia from three Black Sea ports in Ukraine: Odesa, Chornomorsk, and Pivdennyi, as well as a commercial supply of food and fertilizer.

Ships carrying cargo travel to Istanbul along the designated humanitarian route.

“Russia would have you believe it is being forced to end a deal that it benefits from – a deal designed to alleviate some of the global consequences of its war of choice,” Michael Carpenter, U.S. ambassador to the Organization for Security and Cooperation in Europe, said on July 13, estimating that over 32 million tons of grain and food reached global markets to date as a result of the deal.