The Black Sea wheat crisis

Once again, Turkey is at the centre of events, just as it was four years ago when Ukraine and Russia signed two separate agreements to ensure safe navigation in the Black Sea. Ankara acted as mediator, and President Recep Tayyip Erdogan was the architect of an agreement that was short-lived but also held great significance for his own country. It was the Russians who refused to renew it, attempting once again to block the grain routes to Ukrainian ports, and Kyiv responded by stepping up attacks on Russian military vessels, which have now disappeared from the waters of the Black Sea near Ukraine and have also been moved away from the occupied ports of Crimea. If the wheat trade was able to resume, it was thanks to the way Ukraine managed to turn the tide of the war at sea, starting from a position of great disadvantage. It managed to restore safe navigation and breathe new life into its ports in the Odessa region. In recent weeks, in Ukraine’s most famous port city, the quays have looked desolate; there is no sign of the usual bustle of cargo ships arriving and departing: none have entered since the end of July. The cranes often stand idle; something is no longer working in the waters of the Black Sea. Moscow has stepped up its attacks on ships bound for or departing from Ukrainian ports, with the result that shipowners have begun to call off their voyages: it is too risky, and insurance premiums are too high. The sense of desolation in the ports paints a grim picture when one considers the coming winter and the possibility that the wheat already crammed into the warehouses may well remain there until it rots. Yesterday, Ukraine – again via Turkey – proposed a mutual cessation of attacks on merchant ships in the Black Sea, after Moscow struck 218 vessels in July alone, bringing maritime exports to a standstill. In the first few days of August, according to Politico, Ukraine exported just 463,000 tonnes of grain – a third of its usual rate.

Russia is not targeting Ukrainian ships, but foreign ones, and has so far caused casualties amongst the crews; the aim is to force Kyiv to retaliate for the successes its drones are achieving against ships in Russia’s shadow fleet, including in the Sea of Azov – waters which Russia now occupies entirely and which it believed to be safe from Ukrainian strikes. This is not the case: in July, Commander Madyar launched a successful campaign, sending his drones well beyond the lines that Moscow thought could be reached. Foiled and caught off guard, Russia has decided to take revenge on Ukraine’s wheat trade, which is a vital source of the country’s economy, with 90 per cent of its exports passing through the Black Sea. This campaign is damaging the global economy, and with the blockade of Ukrainian ports – which are operational and open but are considered too risky to access – the price of grain could rise by 20 per cent.

This is not the first time Kyiv has found itself in this situation, and it has therefore already learnt that there is no remedy at sea. In recent years, it had tried to divert part of its exports to rail, a far more expensive method; but on the one hand, there is Moscow, which is targeting trains with increasing frequency – just this week, a moving train was struck in the Odessa region, and the attack was so swift that it was not possible to order the evacuation of the train – and on the other hand, there are neighbouring European countries such as Poland, Slovakia and Hungary, which are not facilitating transport, mainly due to domestic protests: in 2023, Warsaw imposed a ban on imports of Ukrainian grain, in breach of European trade rules. Last week, Kyiv appealed directly to the EU, requesting a loan to enable small and medium-sized farms in Ukraine to store their grain until the end of the crisis, so as not to have to sell it off at a loss.

Kyiv has attempted to reach an agreement with Moldova to resolve issues with its European neighbours, but the route to Chisinau is not suitable for Ukraine’s export volumes. And whilst attempts were made in previous years to divert grain shipments via the Danube, the current low water levels do not allow for the passage of merchant ships.

It is not yet a crisis; the peak periods for harvesting and transport are yet to come, and Ukraine is exploring other options. It has happened before that Moscow has reignited the wheat crisis and attempted to block Ukrainian ports, knowing full well that the absence of cargo ships paints a picture of desolation that the country cannot afford. However, the blockade is not an issue that concerns Kyiv alone and, for this very reason, Turkey is once again stepping in.