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A deal to release key grain exports from southern Ukraine’s Black Sea ports, which was due to expire on Nov. 19, has been extended by 120 days.
What was exported?
The agreement creates safe shipping lanes for exports from three Ukrainian ports.
Some 11.08 million tons of agricultural products have been shipped so far, including 4.5 million tons of corn.
Wheat shipments have reached 3.2 million tons, accounting for 29 percent of total shipments. Other commodities shipped include canola, sunflower oil, sunflower meal and barley.
Has it alleviated the food crisis?
Lower shipments from major exporter Ukraine have played a role in this year’s global food price crisis, but there are other important factors to consider.
These include the COVID-19 pandemic and climate shocks that continue to challenge agricultural production, most recently droughts in Argentina and the United States.
This corridor has led to a partial recovery of shipments from Ukraine, but they are still well below pre-invasion levels and will not fully recover anytime soon.
Getting grain to ports there remains challenging and costly, while Ukrainian farmers have planted fewer crops such as wheat after selling last year’s crop at a loss in many cases, and domestic prices remain low.
Is it driving down global wheat prices?
Wheat prices on the Chicago Board of Trade surged after Russia invaded Ukraine in February, but are now near pre-conflict levels.
Ukraine’s ability to export millions of tonnes of wheat through the corridor has been one of the factors driving down prices. Other factors include a record harvest in top exporter Russia this year, a gloomy global economic outlook and a stronger dollar.
But prices for wheat staples such as bread and noodles remain well above pre-invasion levels in many developing countries as weak local currencies and higher energy prices raise costs such as transport and packaging.
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