NEW DELHI: Last week, Russia bombed the Ukrainian port of Odessa, destroying around 60,000 tons of grain stored for export. It came two days after Russia walked out of the one-year-old Black Sea Grain deal whereby it had agreed not to attack ships carrying Ukrainian grain to overseas destinations, around 33 million tons were exported in the process. So, what explains Russia’s action?
Russia says the deal should also allow the export of its own grain and fertilizer currently under international sanctions because of the Ukraine war. Moscow is also demanding that sanctions be lifted on its agricultural bank and its SWIFT membership restored, it wants to resume exports of ammonia.
The West is unlikely to bite for now, but with IMF’s warning that the world could face a food shortage again with poorer countries facing the brunt the pressure on the West to act is likely to grow.
Meanwhile, India is watching the developments closely. Wheat production has fallen domestically and mill owners are demanding that imports be allowed so the prices could remain stable and they do not go out of business. But the moment India does that, international wheat prices will shoot up worsening the problem.