Since the restoration of the Black Sea “Grain Corridor”, the first humanitarian grain carrier has set off for Africa.
On August 14th, the Ukrainian side announced that a ship chartered by the United Nations had loaded 23,000 tons of wheat and was ready to leave for Africa. This is the first such ship within the framework of the Black Sea food export agreement brokered by the United Nations and Turkey in late July.
Ukrainian Infrastructure Minister Oleksandr Kubrakov said that the grain carrier named “Brave Commander” is ready to leave for Africa. For security reasons, he did not specify the specific departure and arrival dates. However, Marxer Malcenco, governor of Odessa, revealed that the ship left the port of Denny, Pi Fu, in Uzny on 14th. It plans to sail to Djibouti, a country in northeast Africa, where food will be transshipped to Ethiopia.
Ethiopia is one of the five countries identified by the United Nations as facing the threat of hunger. At present, the country is in the worst drought in 40 years, and thousands of people have died of hunger or disease this year. The weather forecast shows that Ethiopia will usher in the fifth consecutive rainy season without rain in the coming weeks.
According to a new assessment by the Famine Early Warning System Network, millions of families in Ethiopia will find it difficult to cope with this shock. The country’s demand for food aid has reached a record level, and as many as 15 million people need food aid.
Although this aid is only “nine Niu Yi cents” for the huge demand, the World Food Program still regards it as an “important step” to transport Ukrainian food to the most affected countries.
Denise Brown, the United Nations coordinator in Ukraine, described the incident as “very positive”. He said that Ethiopia urgently needs these foods, and the United Nations will make efforts to ensure that the food will continue to be delivered to African countries facing famine and sharp rise in food prices. He also revealed that Ukraine is considering using railways to increase grain transportation, and the Ukrainian Ministry of Agriculture also plans to open up a new truck route to Poland.
According to a UN e-mail obtained by politics, at present, more than 60 countries in the world are facing enormous pressure on food imports. Even with the mediation of the United Nations, Ukraine can export food, but it has not reached many countries in need. According to the data of the World Food Program, 345 million people in 82 countries are facing serious food insecurity, and 50 million people in 45 countries are on the verge of famine. Without humanitarian support, they may be pushed to the brink of collapse.
UN Secretary-General Guterres said that the Black Sea food export agreement will bring relief to developing countries on the verge of bankruptcy and the most vulnerable groups on the verge of famine.
According to a report by insurance broker Marsh, at least 50 countries depend on Russia and Ukraine for 30% or more of their food supply, including many developing countries. For example, Turkey imported 78% wheat from Russia and Ukraine in 2020, and Brazil is the main market of Russian fertilizer.
According to the Ukrainian side, since the first commercial grain carrier set off from the Black Sea on August 1, 16 such ships have transported grain to the world market. As of August 10, the data shows that about 370,000 tons of agricultural products have been transported. But they are all used as animal feed or biofuel, and are mainly shipped to Turkey or western European countries. These agricultural products are mainly corn, and a small amount of soybeans, sunflower oil and sunflower seed meal. At present, wheat has not been delivered as a staple food for human beings.
According to the United Nations food price index, global food prices fell by 8.6% in July, especially the prices of wheat and vegetable oil. However, compared with last year, food prices are still obviously high. After the fall, the food price in July is still about 44% higher than that in 2020.
Some analysts believe that the Black Sea Grain Corridor can partially alleviate the food shortage problem, but it is difficult to achieve in the short term. The agreement involves three ports in Pi Fu, Odessa, Cherno, Moske and Danny, with a total transportation capacity of about 3 million tons per month. Some analysts predict that this export level may not be fully realized until October. Nick Robson, global head of credit business of insurance brokerage firm Marsh, predicts that it may take 12-18 months to see significant improvement.
Transporting a large amount of grain requires a large number of ships, but some shipowners are cautious about entering the war zone, especially under the threat of mines and high insurance costs. Elena Faige Neroba, business development manager of Maxigrain, a Ukrainian grain brokerage company, said that the main challenge at present comes from mines, and shipowners are holding a wait-and-see attitude and want to see how other ships can make decisions again.
Although military diving teams from Romania, Bulgaria and Turkey are clearing mines in the relevant waters, it may take several months to clear them. At present, the Black Sea Agreement is only valid for 120 days.
Although some insurance companies are willing to provide insurance, the overall insurance cost for ships entering Ukrainian ports is still high. In addition, recruiting crew members is also a challenge. When the conflict between Russia and Ukraine just broke out, about 2,000 sailors from all over the world were stranded in Ukrainian ports, and 450 people have not left yet.
Risk analysts said that the rising global food prices and the shortage of food and fertilizer caused by the conflict between Russia and Ukraine may trigger further economic turmoil and test western companies with overseas operations in the coming months. Nick Robson of Marsh, an insurance economic company, said that countries that rely on imported food are relatively risky, and the impact of extensive austerity policies and epidemics on public finances may damage the ability of some countries to issue food subsidies.
Srdjan Todorovic, head of terrorism and hostile environment solutions for Allianz Global Company, said that food insecurity is definitely a global problem and one of the main topics that the company should pay attention to.