NEWS HIGHLIGHTS
Theme : India & Foreign Relations ; Economics
Paper : GS - 2, GS - 3
To prevent disruption to global food supply chains due to ongoing international conflicts and war, Russia on Wednesday re-joined the Black Sea Grain deal. The Black Sea Grain deal endeavors to tackle escalating food prices emanating from supply chain disruptions because of Russian actions in Ukraine, the world’s ‘breadbasket’.
TABLE OF CONTENT
- Context
- Black Sea Grain Initiative
- Importance of the Deal
- Share of Ukraine’s grain export destinations
- India’s role
Context: To prevent disruption to global food supply chains due to ongoing international conflicts and war, Russia on Wednesday re-joined the Black Sea Grain deal. The Black Sea Grain deal endeavors to tackle escalating food prices emanating from supply chain disruptions because of Russian actions in Ukraine, the world’s ‘breadbasket’.
What is the Black Sea Grain Initiative?
- The deal, brokered by the United Nations (UN) and Turkey, was signed in Istanbul in 2022. Initially stipulated for a period of 120 days, with an option to extend or terminate thereafter, the deal was to provide for a safe maritime humanitarian corridor for Ukrainian exports (particularly for food grains) from three of its key ports, namely, Chornomorsk, Odessa and Yuzhny/Pivdennyi. The central idea was to calm markets by ensuring an adequate supply of grains, thereby limiting food price inflation.
- Ukraine is among the largest exporters of wheat, maize, rapeseed, sunflower seeds and sunflower oil, globally. Its access to the deep-sea ports in the Black Sea enables it to directly approach Russia and Europe along with grain importers from the Middle East and North Africa. Russia’s action in the East European country has now disturbed this route, earlier used to ship 75% of its agricultural exports – precisely what the initiative sought to address.
- The deal put in place a Joint Coordination Centre (JCC), comprising senior representatives from Russia, Turkey, Ukraine and the UN for oversight and coordination. All commercial ships are required to register directly with the JCC to ensure appropriate monitoring, inspection and safe passage. This is done so as to ensure there is no unauthorized cargo or personnel onboard.
Importance of the deal:
- As per the UN Office for Coordination of Humanitarian Affairs, approximately 9.8 million tonnes of grains have been shipped since the initiative was commenced. The UN Food and Agricultural Organisation’s (FAO) Food Price Index, which assesses the monthly change in international prices of a basket of food commodities, fell for the sixth consecutive month in a row this October.
- The Black Sea grain initiative has also been credited for having made a “huge difference” to the global cost of living crisis.
Share of Ukraine’s grain export destinations :
- 44% of the shipments, which include corn, wheat, rapeseed, and sunflower oil among others, reached high-income countries (including Spain, Netherlands and Italy among others)
- 28% reached low and middle-income countries (Egypt, Iran, Sudan and Kenya among others)
- 27% reached upper-middle income countries (Turkey, China and Bulgaria among others).
India’s role:
- The Russia- Ukraine war created a global shortage of foodgrain supply. India was poised to fill this void by exporting its surplus grain, especially wheat to countries like Egypt. However, the government realized that to ensure that India’s domestic demand for foodgrain is adequately met, it was necessary to prevent large-scale export of the same.
- Consequently, with the resumption of the Black Sea Grain initiative, India is set to lose out on this opportunity. However, we should first raise our domestic production beyond our requirements for food security, and then look for exporting the same.
FAQs :
1. What is Black Sea Grain Initiative ?
Answer : The Initiative eased Russia’s naval blockade and saw the reopening of three key Ukrainian ports.The agreement to create the sea corridor was negotiated by representatives from Ukraine, Russia, the UN and Turkey in July this year.The agreement created procedures to safely export grain from certain ports to attempt to address the 2022 food crisis.
2. Who brokered the deal ?
Answer : The deal, brokered by the United Nations (UN) and Turkey, was signed in Istanbul in 2022.