At first, Russia only threatened, but on July 17, the country withdrew from the agreement that allowed grains produced in the Ukraine to be exported. Since the start of the war, this was the main agreement made between Kiev and Moscow. Stitched together, one year ago, with the support of Turkey and the United Nations (UN), the agreement allowed Ukrainian ships filled with food to cross the Black Sea without the threat of being attacked by the Russians.
The allegation made by Vladimir Putin, Russia´s President, to withdraw from the deal was that the conditions demanded by the Kremlin were not put in place. As well as abandoning the deal, Russia began to attack cities on the coast such as Odessa, where Ukraine´s main port is located, disturbing the distribution of products even more.
Ukraine is the world´s fifth wheat exporter, answering for 10% of the exports of this grain, according to the Organization for Economic Cooperation and Development (OECD). The country is also amongst the three greatest exporters of barley and corn and is the number one supplier of sunflower oil.
With the barrier to distributing these foods, a shortage is expected and, consequently, an increase in the prices of products made from these items throughout the world. On the Chicago Board of Trade, the main world financial institution for the trade of agricultural commodities (non-industrialized basic items), future wheat contracts shot up 4% after the Russian attack on Ukrainian ports.
The impact for us, Brazilians, is a possible increase in the prices of food products based on these grains, such as the bread we buy at the bakers. According to the UN, the poor nations are the ones who will suffer the most with the end of the deal. “The higher prices will be felt more by developing countries. Many may die as a result of these decisions”, said Martin Griffiths, UN´s Under-Secretary-General for Humanitarian Affairs.
Sources: CNN, Poder360, BBC and Money Times.
