Global food security concerns reignite as clock ticks down on Ukraine grain deal

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• John Yang:

  The wartime agreement allowing Ukrainian grain shipments to safely navigate Russia's blockade was hailed as a beacon of hope when it was reached last summer.

  It eased a global food crisis and has kept food prices around the world stable ever since. But it's set to expire on Monday and Russia is threatening to pull out of it. As Ali Rogin reports that's raising fears about global food security all over again.

• Ali Rogin:

  On the Black Sea, a rare point of cooperation between two nations at war, Ukraine has shipped nearly 33 million metric tons of gain, oil and other products since the start of the conflict, all things to the Black Sea Grain Initiative. Once touted as a miracle in wartime.

• Antonio Guterres, Secretary-General, United Nations:

  Today, there is a beacon on the Black Sea. A beacon of hope, a beacon of possibility, a beacon of relief.

• Ali Rogin:

  The groundbreaking deal has been renewed three times since its first signing, but it may not be renewed again. Russia has also slowed the pace of shipments by delaying ship inspections. Ukrainian grain once left idle in silos and greeneries before the deal now sits waiting on board dozens of vessels in the waters off Turkey.

  Russia is threatening to end its cooperation all together. It claims the UN hasn't done enough to facilitate its own exports of food and fertilizer, but President Vladimir Putin is not ruling out a possible return.

• Vladimir Putin, Russian President (through translator):

  We can suspend our participation in the deal. And if everyone once again says that all the promises they have made to us will be kept let them fulfill these promises and then we will immediately rejoin the steel.

• Ali Rogin:

  Russia has been exporting record amounts of wheat in the last year. While Ukrainian officials report their grain exports have dwindled, but the deals impacts extend beyond Eastern Europe.

• Ursula Von Der Leyden, President, European Commission:

  The world needs it. Russia has a responsibility to prolong it. Otherwise, global food insecurity will be the consequence. So now the ball is in President Putin scorch. And the world is watching.

• Ali Rogin:

  Ukrainian grain feeds 400 million people worldwide, much of it going towards emergency programs in places like Yemen, Afghanistan and Somalia. The Grain Deal has also helped to calm global markets.

  Food prices were on the rise before the war started but skyrocketed after Russia's invasion. Since the global export of Ukrainian grain resumed, the markets have stabilized. That's been welcome news to relief organizations like the International Rescue Committee, which has a presence in East Africa.

• Shashwat Saraf, International Rescue Committee:

  Any amount of food that leaves the Ukrainian ports and comes to the global market is food in the market. Food sitting in the — at the port in Ukraine does not help anybody. Food moves out. It meets the needs of the global market. And it ensures that the global markets are more stable.

• Ali Rogin:

  But that stability remains elusive as the deals expiration date inches closer, with no renewal in place.

  For more on what's at stake, I'm joined by Susannah Savage with POLITICO Europe. Susannah, thank you so much for joining us.

  You've been reporting that the Ukrainian capital of Kyiv basically believes that this deal is already dead. And we also heard from National Security Adviser Jake Sullivan today, here's what he had to say,

• Jake Sullivan, National Security Adviser:

  Look, I can't predict what Vladimir Putin will do. He has been all over the map with respect to this initiative over the course of the past many months, it is possible that Russia pulls out of it, it is possible they continue. We are prepared for any scenario. And we're working closely with the Ukrainians on that.

• Ali Rogin:

  So in terms of scenarios, what does your reporting tell you is likely to happen?

• Susannah Savage, POLITICO:

  Well, I think that at this stage, Russia has given every signal that it does intend to pull out of the deal. And it said this before it's repeatedly threatened to pull out of the deal and then renewed it. But this time feels very different. But regardless of whether it actually efficient extends the deal or not.

  The deal is essentially not working as it should, the amount of shipments coming out through the initiative have plummeted in recent months. And so, Ukraine has started to enact Plan B and to put into works a different routes to get its grain out of the country. So it's essentially preparing for this deal not to continue.

• Ali Rogin:

  And you just said that this time seems different. And Russia may not renew, why does it seem different?

• Susannah Savage:

  In the past, leading up to the renewal, it's tended to slow inspections of shipments, which has and, you know, to slow shipments leaving the Black Sea and with Ukrainian grain, but this time it's really doubled down on the threats to walk away and really stressed the fact that it isn't seeing benefits from the deal by which it means that it's not it seeing it — Russia claims that it had there are too many obstacles to its own food and fertilizer exports.

  And therefore it doesn't want to continue with it. It's really doubled down on those threats. The amount of shipments coming out of the under the initiative has plummeted. There hasn't been a new vessel of registered under the name since the end of June for example, Ukraine, sorry, the U.N. and the E.U. have even tried to come up with compromise offers to try and keep Russia in the deal, or which have been rejected. So I think that's one of the signals that this is different this time.

• Ali Rogin:

  One of the things that Russia had wanted was additional sanctions relief, they did get some relief for their exports. But they said that sanctions on the logistical aspects of that kind of trade, including insurance and shipping companies, those sanctions were preventing countries from doing business with them.

  So we're those sorts of concessions ever on the table in terms of this round of negotiations.

• Susannah Savage:

  Well, the E.U. has previously carved out exemptions in terms of its sanctions on Russia, to enable its food and fertilizer exports. And this time, what the E.U. and the U.N. have offered is to carve out an exemption essentially to allow Russia's main agricultural bank to function under the SWIFT international payment system.

  Russia has rejected that concession or that compromise. I don't think beyond that. There are further, you know, I don't think it's on the cards to further change sanctions, to appease Russia, because as far as the West is concerned, its sanctions do not target food or fertilizer exports. And Russia is getting both these exports out of the country.

• Ali Rogin:

  You mentioned the Plan B's that Ukraine is working on what are those?

• Susannah Savage:

  So, I mean, there's been talk of Turkey, intervening in the Turkish Navy escorting ships through the Black Sea. This has been dismissed by various diplomats and other analysts who say that that just isn't necessary and isn't likely to happen.

  What Ukraine is doing is organizing, essentially state insurance. So a $500 million guarantee fund to compensate companies who ships pass through the Black Sea for any damages or extra costs they may incur if the black sheet and blacks initiative isn't extended. Because getting insurance at the moment is obviously very difficult.

  It's also looking at extending the amount of grain shipments that pass through the Danube River. And there's already a large amount of grain that's exported through solidarity lanes out through Europe, but it's trying to extend this using the Danube River. And that seems to be a fairly viable option.

• Ali Rogin:

  And Susannah, assuming this deal is not renewed, what then happens in terms of market reaction as well as immediate supply?

• Susannah Savage:

  Well, I think, you know, the market this isn't we're not looking at the same scenario as we were last February when Russia invaded Ukraine blockaded the Black Sea. And we saw exports plummet to almost zero and a big market reaction. I think the market has adjusted to having slightly less Ukrainian product in the market, but also to, you know, these other export routes that have been put in place over the last year. And that's one of the main functions of the Black Sea Grain Deal. It has succeeded and given Ukraine time to adapt.

  But that said, every time we see volatility or uncertainty over this deal, there is a small market reaction. And that has a big impact for food insecure countries who are really facing the brunt of the current food crisis and high food prices.

  So I think we can expect a market reaction if Russia walks away from the deal, and that will, you know, inflict pain on countries that are really at the sharp end of this and particularly in Africa.

• Ali Rogin:

  Susannah Savage with POLITICAL Europe, thank you so much for your time.

• Susannah Savage:

  Thank you very much.