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Where Are Ukraine’s Grains Actually Going Across the World?

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The first shipment of more than 26,000 metric tons of Ukrainian food under the Black Sea Grain Initiative cleared to proceed toward its final destination in Lebanon, November 2022. The arrangement is teetering as Russia threatens to withdraw from it when it expires on May 18, 2023. LEVENT KULU/OCHA

After being concluded 10 months ago to buffer the shock of the Russian invasion on food commodity prices and avert famine in poor countries, the Black Sea Grain Initiative is now being portrayed by Moscow as simply a commercial deal benefiting wealthy countries rather than a humanitarian operation.

Brokered by the United Nations and Türkiye last year, the deal has been widely seen as a rare success amid strained talks between Russia and Ukraine. The agreement has been prolonged twice and is due to expire again on May 18. But negotiations have stalled as Moscow insists it’s not getting its end of the bargain.

The UN, Türkiye, Russia and Ukraine held talks in Istanbul on May 5, ahead of discussions between the deputy defense ministers of the warring nations on Wednesday, May 10, in an 11th-hour attempt to salvage the grain deal.

Russia has been threatening to walk if the West doesn’t lift banking and insurance hurdles blocking its food and fertilizer exports. Unlike energy, trade in those products is not sanctioned, though it has become difficult for buyers to finance and ensure commerce with Russia due to other sanctions. Rebeca Grynspan, secretary-general of the UN’s trade and development agency, Unctad, was in Moscow on May 5 to discuss the UN’s support to lift those obstacles.

Moscow, meanwhile, has downplayed the positive impact of the deal, claiming that the poorest of countries most in need have received practically none of the grain shipments. The UN and others have defended the importance of the Ukrainian exports. So where is the truth?

What the UN says

The grain deal initiative set up a Joint Coordination Center in Istanbul to facilitate the movement of shipments of foodstuffs from Ukraine ports through a  humanitarian corridor.

Ismini Palla, spokesperson for the center, told Geneva Solutions that as of April 27, the World Food Program (WFP) had procured 595,169 metric tons of wheat to support operations in Somalia, Yemen, Ethiopia, Kenya and Afghanistan.

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That’s only a fraction of the total of 29.5 million tons of combined foodstuffs shipped from Ukraine over the past 10 months, according to the UN. Beyond those figures, the numbers scramble begins.

Data from the UN shows that food exports from the besieged country — including barley, corn, rapeseed, sunflower oil and meal and wheat — have gone nearly equally to developed (45 percent) and developing countries (49 percent). Only six percent has gone to the least developed countries. But which country qualifies as developed or developing depends on the World Bank’s definition, where the United Arab Emirates and China are considered developing nations, just like Kenya and Sri Lanka.

breakdown of cargo destinations shows China, Spain, Türkiye and Italy among the top recipients.

Recorded shipments of grains from Ukraine’s three Black Sea ports as of May 3, 2023. 

As the biggest global hub for trading in grains and oil seeds, Geneva houses the sector’s giants, including Cargill, Bunge, Louis Dreyfus Company and China’s Cofco International.

Florence Schurch, secretary-general of the Swiss Trading and Shipping Association, a representative group for the business, told Geneva Solutions that traders were very nervous about the grain deal.

“We are very happy that the corridor exists because the trading companies have lots of assets in Ukraine, while Ukraine needs to support their cereals,” she said. “It’s a win-win situation.”

However, since mid-March, a slow-down in inspections of ships before they exit the Bosphorus straits in Istanbul from roughly 15 to just a couple or less in recent days has created “a lot of instability.”

On May 4, 66 vessels were waiting to be inspected, including some ships stranded for weeks, Schurch said. Such delays incur mounting costs for operators, including fuel, insurance and seafarer expenses. Beyond the difficulties of operating in a war zone, she said insurance and ship chartering have become “crazy expensive” under the circumstances. [Update: As of May 8, Ukrainian officials reportedly say Russia has stopped the registration of incoming vessels, while Turkish officials said extending the deal was possible as talks continue]

“If everything becomes too complicated, there is no purpose in pursuing those activities,” Schurch added.

Is food going where it’s needed most?

Humanitarians and traders recognize the impact of the initiative’s corridor on global commodity prices since it was established. While prices were already on the rise since mid-2020, a sharp upward spike following the Russian invasion of Ukraine last year was reversed after the grain deal was agreed, according to data from the Food and Agriculture Organization, or FAO.

Speaking at a UN press briefing on May 5, Upali Galketi Aratchilage, senior economist at the FAO, acknowledged that retail prices in various countries have not always followed the decline in wholesale prices.

Nonetheless, accounting for 10 percent of the global wheat market, 15 percent of the corn market and more than 50 percent of the sunflower oil market, Ukraine’s repercussions on global prices are significant.

Schurch said that in some cases, grains might be shipped to terminals such as in Rotterdam in the Netherlands, where they would be processed into other foodstuffs before being sent to other countries.

But a senior Geneva trader, who asked not to be named, told Geneva Solutions that buyers such as China and Spain, representing the lion’s share of shipments, were generally buying certain Ukrainian grains, including corn and wheat — depending on qualities — for domestic markets and mostly for animal feed.

Other countries, such as Türkiye and Egypt, imported wheat and corn from the Ukraine to be milled for bread for human consumption.

Shipments, including for humanitarian cargos, such as those consigned by the World Food Program, are decided through tenders. Countries or clients usually issue a tender for a specific commodity as well as payment and delivery terms before trading companies respond to it.

“There is always a trader who is facilitating the work” of UN food shipments, particularly with regard to freight logistics, the trader said. While the UN has announced ships being chartered through the initiative to deliver food to least-developed countries, the volumes purchased have been “really, really small,” he added.

A WFP spokesperson told Geneva Solutions in an email: “WFP observes the principle of fair and transparent procurement, buying most of its food in competitive processes, choosing the best offer based on commodity price and transportation cost.”

He added: “In the case of the Black Sea Grain Initiative, some procurement is done with open tenders (Ukraine winning the contracts with best prices) while other tenders specify the requirement (from donors) of wheat grain to originate from Ukraine.”

“The world is splitting into two,” the trader noted, explaining that there has been an increasing number of government-to-government deals between Russia and developing countries considered friendly by the Kremlin to purchase high-quality wheat for bread.

“Russian national (trading) companies may be able to offer certain benefits, and they are becoming really aggressive (on prices),” he added.

Future price fears

“We hope that the UN will do something to motivate the inspection teams to act so that there will be more inspectors and resume work as before,” said Schurch about the huge bottlenecks in traffic to the northeast of Istanbul a week before the grain deal’s expiry.

She said that her organization has been working with the Swiss mission to the UN in Geneva to voice members’ concerns over the initiative’s operation within its apparatus and that it has been “very helpful.”

The Swiss mission did not wish to comment on any interactions with representatives of the Geneva-based sector.

But traders and economists warn about future price rises should the deal collapse.

Late last week, the uncertainty had already caused reverberations on markets, with Egypt purchasing a large cargo of wheat — some 655,000 metric tons — from Russia and Romania ahead of global markets and wheat futures rallying in the Chicago grain market. “We are in an agricultural war,” the trader said. Similarly to previous conflicts, when energy prices jumped right away due to geopolitical uncertainties, this war has seen agricultural prices reacting immediately for the first time.

FAO’s Galketi Aratchilage explained that if the grain deal hits a wall next week, food prices will resume their upward trajectory after last year’s respite. If Ukrainian farmers cannot sell their crops, they may put off sowing for the next harvest, reducing future supplies and driving prices even further up.

A deal was recently struck between Ukraine and the European Union to resume transit of certain grains through the continent and remove import bans imposed by five EU countries in April to protect their internal markets. But it would hardly be enough to make up for the volumes that can go through the Black Sea grain deal, as trucks and train carriages would not be able to carry enough volume to the markets.

It’s an issue that can complicate what the Geneva trader presented as the food products’ prime role: “It’s wheat and vegetable oils that are the critical pillars not only to feed the world but to avoid revolutions,” he said.


We welcome your comments on this article.  What are your thoughts on Russia's threats to leave the Black Sea grain deal?

Paula Dupraz-Dobias is an award-winning investigative journalist and news and documentary producer with over 30 years of experience working in Europe, North America and South America. She is based in Switzerland but works regularly in Peru and the United States.

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