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Tuesday, September 27, 2022
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Russian Missile Attack Jeopardizes Ukraine Wheat Export


A regional government building destroyed by a Russian missile attack in the southern Ukrainian city of Mykolaiv. | Image by Genya Savilov, AFP via CNBC

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The UN stated last week that Russia and Ukraine had reaffirmed their resolve to start transporting the millions of tons of grain that have been accumulating since the invasion of Ukraine, causing the price of wheat to decline. However, a missile attack on the Ukrainian port of Odesa prompted concerns about the deal’s viability in establishing a corridor for grain shipments from the war-torn nation.

Despite fluctuations in grain prices caused by the missile attack, the deal between Russia and Ukraine was a crucial step in allowing exports from three Ukrainian Black Sea ports. The agreement, which has a 120-day shelf life, calls for monthly Ukrainian grain shipments of 5 million tons to hit the global market.

A European trader told Reuters, “A restart of Ukrainian exports will not only need a safe shipping channel, but also safe ports. The Russians have created doubt about the safety of ports hardly before the ink was dry on the shipping agreement. Doubt is there again.”

Damage from the missile attack to Mykolayiv, one of the biggest agricultural ports in Ukraine, might have made it even more difficult to get grain shipments to something near pre-war levels. The shipments have largely been halted since the invasion, as The Dallas Express previously reported. Mykolayiv used to account for about a quarter of the country’s grain shipments.

This decrease in grain shipments from one of the top grain exporters in the world has contributed to food inflation worldwide, and UN experts have warned that it might cause historic levels of famine and mass emigration.

While some grain still makes it out of Ukraine via road, river, and train, major purchasers are forced to look elsewhere, driving up costs and escalating the food insecurity crisis.

According to U.N. Secretary-General Antonio Guterres, resuming seaborne commerce would close such gaps. He encouraged the agreement to be “fully implemented.”

For its part, the Kremlin stated that its recent missile strike on Odesa would not impact grain exports. Kremlin spokesman Dmitry Peskov insisted Russia had attacked military facilities.

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1 month ago

Maybe the Biden administration should send billions more money to Ukraine. Apparently the billions of dollars they have already sent isn’t working.