Since the start of the Russian invasion of Ukraine fears have developed over global food shortages with Ukraine being one of the world’s leading exporters of staple grains. The Russian Invasion of Ukraine completely stopped food exports from the country which accounted for roughly $27 billion in 2021 and since then have been completely halted.
Fortunately, last month Russia and Ukraine were able to strike a deal for the resumption of grain exports in an attempt to ease global food shortages.
Today Ukraine was able to launch its first shipment out of the Odesa port carrying 26,000 metric tons of corn headed down the Black Sea towards Tripoli. The deal will be extremely beneficial for Ukrainian farmers; however, the number of exports will still be much lower than in previous years with an expected export of 30.6 million metric tons throughout the 2022-2023 season which is still about 16 million less than the year before.
The resumption of food exports will also have lasting benefits for the Ukrainian economy. Farming accounted for roughly 40% of all Ukrainian exports and employed about 14% of the population. The influx of much-needed cash can improve the living conditions of those still within the country as well as provide assurance that farming will be able to continue within the country in the coming years.
Ukraine and food supply are not out of the woods yet as many are skeptical about whether Russia will uphold its end of the deal. Russia sent missile strikes to the port of Odesa on July 23rd just hours after the two parties signed the deal. The deal protects vessels carrying food shipments as well as three ports in the area.
The impact of the deal has already been felt around the world as grain prices have significantly dropped this past week.
Source: Wall Street Journal