https://asiatimes.com/2022/
A Black Sea Grain Initiative shipment at sea. Image: UNCTADJAKARTA – Three bulk carriers are heading for Indonesia carrying the first shipments of Ukrainian wheat since last February’s Russian invasion, but questions remain over how much of the beleaguered country’s huge backlog of grain is getting to where it is needed the most.
More than 10 million tonnes of wheat and other grain has so far traversed the humanitarian corridor conceived under the July 27 Black Sea Grain Initiative, with United Nations Secretary-General Antonio Guterres saying at the time it would be going to “the most vulnerable people on the edge of famine.”
Yet until November 8, only nine of the 482 ships to pass through the narrow 310-nautical mile lane have been destined for what is classified as “low-income” countries, according to the Istanbul-based Joint Coordination Centre (JCC), which supervises the traffic flow.
Even then, those have only included Ethiopia (82,100 tonnes), Sudan (65,340 tonnes), Somalia (28,500 tonnes), Yemen (87,500 tonnes) and Afghanistan (30,000 tonnes), carrying a tiny percentage of the 20 million tonnes of grain that had been trapped in Ukraine since the Russian invasion.
About two-thirds of the shipments have been destined for high-income (215) or upper-middle-income (181) nations, with Turkey leading the way in that category as the final port of call for 134 ships. The rest have gone to designated low-income and lower-middle-class countries.
Russian President Vladimir Putin has already accused the West of deceiving developing nations, claiming that “almost all” the grain was going to rich European countries, notably Spain and Italy, which between them have taken 136 shipments so far.
Despite the optics, however, officials say ship movements are immaterial due to transhipments and the fact that 60% of the 4.4 million tonnes the World Food Programme (WFP) distributed last year in food aid came from Ukraine.
Istanbul, at the entrance to the Sea of Marmara and the Mediterranean, and other Turkish ports are normally transshipment points for about 30 million tonnes of cargo a month, according to Turkey’s Ministry of Transport and Infrastructure.
The perilous route of the Black Sea Grain Initiative. Image: WikimediaJCC spokesperson Ismini Palla says it is beyond the mandate of the center to monitor what percentage of the grain is being processed and re-exported, but she said vessel movements do not provide an accurate picture of final destinations.
The WFP says it has already shipped 200,000 tonnes of wheat from Ukrainian ports direct to the hungriest sections of the population in Afghanistan, Ethiopia and Yemen and has imminent plans to send a further 160,000 tonnes for the “most vulnerable.”
But, more importantly, the organization says restoring Ukraine’s grain exports will bring down prices to a point where the poorest countries and their aid benefactors will start to see the benefits.
“There’s no single solution to the world food crisis, but reintegrating Ukrainian food and Russian food into global markets is a step in the right direction,” a WFP spokesman told Asia Times.
“Food exports under the Black Sea Grains Initiative have helped stabilize global food commodity markets and limit food price inflation, with knock-on benefits felt all around the world,” he said.
“We are seeing positive impacts: seven consecutive months decline in food prices, though food prices remain at near-record levels. The world needs food to flow uninterrupted and we must do everything in our power to ensure it is available and affordable for many nations heavily reliant on food imports.”
With prices soaring by 300% since the outbreak of the war, the UN has also warned about an impending shortage of fertilizer, vital for soil fertility in Africa and other vulnerable countries.
The African Development Bank warned earlier this year that unless an existing two million deficit in supply isn’t made up, food production will decline by at least 20% and the continent could lose a catastrophic US$11 billion in production value.
Russia recently temporarily suspended the Black Sea agreement after it claimed that ships using the corridor had been involved in an October 29 Ukrainian drone attack on its Black Sea Fleet naval base at Sevastopol on the Crimea peninsula.
One warship was badly damaged in the pre-dawn raid by 16 drones, some of which were launched from the sea. The attack came as Ukraine battled Russian forces in the Kherson region, which serves as the gateway to Russian-annexed Crimea.
The corridor deal comes up for renewal on November 20, just four days after the G20 summit in Bali, where the food crisis is expected to be one of the priority issues among the leaders, including US President Joe Biden and Chinese leader Xi Jinping.
Russian President Vladimir Putin is facing domestic criticism for his war. Image: TwitterPutin, facing battlefield setbacks in Ukraine and no doubt being careful to protect his back in Moscow, is unlikely to make the trip. But he has said if he is not there Russia will still be represented by a high-level delegation.
Although the flow of grain from Ukraine remains in full swing, only 40 shipments have so far gone to Asia with Bangladesh receiving 268,000 tonnes of wheat and India taking seven cargoes of sunflower oil.
China has received 21 shipments, amounting to 990,000 tonnes of corn, sunflower meal, sunflower oil and barley, while the three Marshall Islands-flagged ships currently en route to Indonesia are carrying 155,000 tonnes of wheat.
Delays between leaving port and UN-administered inspection clearances can vary. Usually, it is only a few days, but the largest single shipment – 71,1500 tonnes of wheat aboard the Indonesia-bound bulk carrier Argonaut – took three weeks.
The same was true for two other Marshall Islands-flagged, Indonesian-bound ships, Shaman Wisdom and the Magnum Power, which both sailed in early October and were finally cleared on the same day, October 31.
Palla says that during that period there was a backlog of 170 vessels the JCC had to line up for inspection. The delays were exacerbated in late October by Russia’s threat to terminate the agreement.
The only other East Asian destinations have been South Korea (198,700 tonnes of corn), Vietnam, which is taking 116,000 tonnes of wheat, and Malaysia with a small shipment of 4,000 tonnes of sunflower oil.
The Indonesian shipments are a drop in the bucket compared to the 11.2 million tonnes Indonesia is expected to import in 2021-22, with per capita consumption currently measured at 27.4 kilograms and likely to reach 29.01kgs by 2031.
The last shipment of the grain from Ukraine was in January, a month before Moscow’s invasion when Russian warships blockaded access to Ukraine ports and Kiev responded by sewing mines to deter naval attacks along its coastline.
Flour Millers Association chairman Franciscus Welirang says Indonesia still has enough wheat to feed its massive instant noodle industry and other needs, despite Ukraine supplying $732 million in exports in 2021.
The hole, he says, has been filled by Australia, historically Indonesia’s biggest supplier, India, Brazil, Argentina, Canada and the United States. But higher flour prices have also meant a 3.3% drop in wheat demand, compared with a growth of 4.2% in 2021.
Australian wheat export figures are confidential, but production is expected to be the second highest on record in 2022-23 with the value of exports forecast to reach $11.7 billion on the back of higher world prices.
“Good harvests and high prices have meant that our exports of grains to Indonesia in both volume and value terms have done very well,” said one Australian official.
Australia is one of the world’s largest wheat exporters. Photo: AgenciesBefore the invasion, Ukraine shipped about five million tonnes a month through the waterway, but exports have yet to return to that level because many companies are still afraid of hitting mines or being stuck in port if the Russians change the rules.
There is also the issue of price. The Ukraine war has increased the cost of transporting grain and other dry bulk cargoes by 60% with smaller Turkish shipping lines more willing to accept the risks involved in negotiating the Black Sea.
Ukraine was the world’s seventh largest producer of wheat in 2020-2021 with 33 million tonnes, or about 9% of global exports. In normal years it supplies 42% of global sunflower oil exports, 16% of corn and 10% of barley exports, according to the UN Food and Agriculture Organization.
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