Global Food Prices Could Skyrocket

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A deal to allow agricultural exports from Ukraine and Russia through the Black Sea faces an end without a renewal in sight, CNN reports.

Ukraine and Russia are both huge exporters of agricultural goods, especially grain destined to developing countries in Africa. The war in Ukraine has impacted shipping and threatened to cause a worldwide food crisis.

In a deal reached in July 2022, Ukraine was allowed a small maritime corridor of free passage to bring its goods to market. Moscow claims in response that the deal has not achieved its aims, bringing no benefit to its friends in Africa while still allowing Ukraine to generate revenues to pay for the war effort.

Alternatives to this are not easily managed. Ukraine could attempt to run protected convoys in a similar manner to World War II Atlantic Allied shipping. However, anti ship technology has dramatically evolved since and could end up in failure.

Another option would be to transport grain to other countries via land routes before shipping them, though routing them through the Baltic Sea would not be an easy feet to achieve. Access to other Black Sea ports via land are blocked by the Russian aligned state of Transdniestria.

US producers could see huge export opportunities up for grabs if the deal isn’t renewed. However, this would in turn impact food prices at home. American consumers have already been facing rising inflation, which would only increase even further.


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