Russia shakes Ukrainian grain pact and strengthens inflation

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Despite the geographical distance, what is happening in Ukraine continues to affect Latin America. These are the impacts for this region and the world due to the passage of grain from Ukraine, giving Russia greater power in the face of rising inflation


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LatinAmerican Post | David Rivadeneira Soto

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Leer en español: Rusia hace tambalear pacto sobre el grano de Ucrania y fortalece la inflación

Last July, an agreement was signed between Moscow and Kyiv, brokered by the UN and the Turkish government led by Recep Tayyip Erdogan, so that grains grown in Ukraine could pass through the Dead Sea without the impediment of Russia, thus unlocking the transport of wheat, corn, and barley to other countries, especially the poorest. This measure was taken to mediate the food crisis and the damming of grains on Ukrainian territory as a result of the war. Volodímir Zelenski, at the time, stated that he accepted this pact through the mediation of the UN in order not to exacerbate the situation of famine in nations of Africa and Asia.

For his part, Vladimir Putin, signing this agreement was part of resuming his role as a legitimate actor in the arena of international politics, as explained by the professor of political science and international relations at ICESI University, Vladimir Rouvinski, to the France 24 media outlet. in Spanish. The safe corridor that had been established thanks to the grain pact is exposed and in danger without the commitment of the Russians. The same professor states that the mutual mistrust between Ukraine and Russia disrupts the continuity of the agreement, although Russia has just announced that it will continue.

Between The Russian-Ukrainian War And Other Factors

For its part, Russia states that the ships are being used for other purposes. As reported by Putin at a meeting of the Security Council of his country, the most recent attack on the Russian naval base in Crimea was the reason why he unilaterally decided to suspend the agreement with the UN and Turkey. As a result of this temporary withdrawal, around 200 ships with wheat were left stationed in the maritime corridor. Although the resumption of the pact was achieved, the Russian president was blunt in clarifying that they reserve "the right to withdraw from this agreement if Ukraine violates these guarantees."

According to Colombian Gloria García-Parra, director of Oxfam for Latin America, in an interview for DW en Español, the food crisis has been a sum of factors that have been acting for more than a decade, so the resumption of Ukrainian grain exports have a positive impact on the decrease in prices, but by itself, it does not solve the situation of populations vulnerable to volatility. On the other hand, food costs, in this case, grains, have been affected for some time for various reasons, among which climate change and increases in the value of fuels and raw materials have a greater influence. as fertilizers and seeds; Of course, to all this is added the war and the damming of the grain.

The True Weight Of Ukrainian Grains In Our Daily Bread

Looking again at the influences of the lack of Ukraine's wheat, the main grain exported to other countries, it is important to recognize that, according to figures from the United States Department of Agriculture, the Ukrainians occupy the seventh place in exporting the cereal with 33 million tons, which places them in an important sector of the supply of this food, although contrary to what is usually said of their first place as a producer and exporter of the grain. In the same vein, the UN Food and Agriculture Organization, FAO, indicated that this year, due to the war, a third of Ukraine's arable land would not be able to grow crops, which would mean that 26.4 million tons of wheat, corn, and barley would not reach the markets.

To continue measuring the weight of the war between Russia and Ukraine on food production worldwide, it is useful to know the figures of the European Union in this regard, according to which Ukrainian wheat crops represent 10% of what is produced in the world, while corn is 15%, barley 13%, and sunflower to produce oil 50%, respectively, the latter being the one with the highest demand. Despite the alarming nature of these figures, it can be deduced that of the Latin American countries, the most affected by the weight of imports from Ukraine to its territory is Mexico, which was one of its main importers of corn, according to data from the Complexity Observatory Economy (OEC), but until 2018, since there is no more recent information since the pandemic.

The UN itself states that the regions most affected by these circumstances regarding the grain pact are Africa, the Middle East, and Asia. According to studies by Aldana Rosillo, cited by the Economic Commission for Latin America and the Caribbean (ECLAC), the greatest impact in South America is caused by the shortage of fertilizers, which affects the total costs of agricultural production; yellow corn and coffee, the most pronounced, in percentages of 40%, and 20% in the case of rice, potatoes and sugar cane.

On the other hand, in countries like Colombia, according to data from the National Association of Industrialists, ANDI, 99.7% of the wheat used in the national industry is imported, which puts products such as bread in the line that absorbs more increments. Pilar Ortiz, the director of the Chamber of the National Federation of Wheat Millers (Fedemol), adds to the difficulties that the war has brought with the blockade on wheat imports, the cost overrun on fertilizers and the dollar rises for the cocktail that makes daily bread more expensive. The National Association of Bread Manufacturers (Adepan), in recent statements to W Radio, stated that it is a challenge for bakers with all the current uncertainty in the grain market to maintain a stable price, an additional reason for the increases. With these data, it is necessary to force the winds of peace between Ukraine and Russia will soon blow.

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