The grounds for the grain deal were calculated – Newspaper Kommersant No. 40 (7485) dated 10.03.

The shortage of grain in the world market due to the problems of Russian and Ukrainian exports is the main topic of the report of the Food and Agriculture Organization of the United Nations (FAO) on the state of the world market. The document looks like a rationale for the fact that the extension of the deal, subject to the removal of formal and informal restrictions on the export of grain and fertilizers from the Russian Federation, will be beneficial to all parties – in addition to eliminating the risks of global food security, it will also unload the Russian domestic market, overstocked after the record harvest of 2022; otherwise, the sown area under cereals can be significantly reduced.

World grain production in 2022/23 agricultural year (July 1 – June 30) will amount to 2.7 billion tons, follows from new report FAO UN. The forecasts in it are improved for all types of grain, except for wheat: in 2023, the sown area in the Russian Federation and Ukraine may be seriously reduced due to the consequences of the military conflict and a record harvest in Russia (153.8 million tons of grain, including 104.4 million tons of wheat). Related to Russian records is the fact that with a global reduction in grain stocks to 844 million tons, wheat stocks will remain at a high level of 306 million tons. At the same time, corn stocks may significantly decrease – due to production costs and other consequences of the Russian military operation in Ukraine, part of the Ukrainian crop remained unharvested.

Considering that in peacetime Russia and Ukraine accounted for more than a third of world grain exports, FAO pays the most serious attention to the prospects for world trade.

Analysts expect the volume of grain trade in 2022/23 agricultural year to be 473 million tons (1.8% below the level of 2021/22).

Separately, the report notes a more than two-fold decline in grain exports from the Black Sea ports of Ukraine (19.2 million tons from July 2022 to February 2023 against 42.6 million tons in the same period a year earlier). As a result, global wheat trade could increase by just 1.1% from 2021/22 levels to 198 million tonnes. For the Russian Federation itself, the export of about 50 million tons of grain in 2023/24 agricultural year remains a critical condition for stabilizing the domestic market and not reducing the sown area (for more details, see “Kommersant” dated February 17).

In the context of negotiations on the extension of the Black Sea Grain Initiative (the deal was concluded by the UN, the Russian Federation, Ukraine and Turkey in July 2022), the report looks like an argument in favor of the fact that the extension of the agreement is beneficial to all parties. It expires next week, March 18, in connection with which the UN and Turkey are negotiating with the countries participating in the deal. On March 8, UN Secretary General António Guterres, who arrived in Kiev, discussed the extension of the deal with Ukrainian President Volodymyr Zelensky – Ukraine still advocates expanding the agreements (we are talking about including Nikolaev in the number of ports for the export of grain). Next week, the UN representatives will also discuss the possibility of continuing the initiative with the Russian delegation.

The Russian authorities, however, believe that the other parties to the transaction do not fulfill their obligations under it. Foreign Minister Sergei Lavrov insists that “the export of Russian agricultural products is being openly hindered around the world,” and Ukrainian grain does not go to needy countries, but settles in the European Union. In response to these statements, the UN previously noted that the organization is doing everything possible for unhindered access to the world market of Russian grain and fertilizers, and the Council of Europe in January 2023 cited statistics according to which the main recipients of Ukrainian wheat were developing countries, including Ethiopia, Yemen, Djibouti, Somalia and Afghanistan accounted for 65% of supplies.

Christina Borovikova