Food exports from Ukraine and Russia have increased since a July 22 grain deal, but critically needed fertiliser exports from Russia are still down despite being covered by the agreement, with financing and shipping still issues, the United Nations said Tuesday.
U.N. trade chief Rebeca Grynspan, who leads the team trying to facilitate unimpeded global access to Russian food and fertiliser, said Russia reported a 12% increase in food exports from June to July. But while there has been “important progress,” the U.N. is concerned about fertilizer exports needed by October and November, the latest for the northern hemisphere planting season, she said.
Fertilisers now are three times the price they were before the COVID-19 pandemic hit in early 2020, Grynspan said, adding that "the crisis of affordability that we have now will be a catastrophic crisis if we don’t solve the problem of fertilizer.”
As an example, she said the sowing season for new crops in West Africa is over and planting was down by a very high percentage because of fertilizer costs.
Grynspan told a U.N. press conference by video from Geneva that the U.N. Food and Agriculture Organization reported that food prices declined globally in August for the fifth straight month. But she expressed concern that this decrease has not been seen in domestic markets, and developing countries especially are still struggling with high food prices as well as inflation, currency devaluations and interest rate hikes.
Amir Abdulla, the United Nations coordinator for the deal to ship Ukrainian grain, said 129 fully laden ships carrying over 2.8 million tons of grain have left the three designated Ukrainian Black Sea ports for different countries.
With grain prices dropping, Abdulla said, the U.N. has seen that people who had been hoarding gran to sell at high prices are now putting it on the market in one or two countries. “Hopefully that will bring some of those local prices down” he said by video from Istanbul.
On July 22, Russia and Ukraine signed separate agreements with Turkey and the United Nations clearing the way for the export of desperately needed grain and fertiliser, ending a wartime standoff that threatened food security around the globe.
Ukraine was one of the world’s largest exporters of wheat, corn and sunflower oil, but Russia’s Feb. 24 invasion of the country and naval blockade of its ports had halted shipments.
Some Ukrainian grain is transported through Europe by rail, road and river, but the prices of vital commodities such as wheat and barley had soared before the grain deal, which U.N. Secretary-General Antonio Guterres called an unprecedented agreement between two parties engaged in a bloody conflict.
Although international sanctions against Russia did not target food exports, the war has disrupted shipments of Russian products because shipping and insurance companies did not want to deal with Russia.
Grynspan, who is secretary general of the U.N. Conference on Trade and Development, said the U.N. has been providing clarifications to the insurance, finance and shipping industry that there are no sanctions on any Russian ships carrying food or fertiliser. She explained that this involves dealing with the private sector where “the market showed a chilling effect.”