What Russia's move to end the Black Sea grain deal could mean for global food prices

Transcript

STEVE INSKEEP, HOST:

Ukraine has been shipping its grain to the world thanks only to an agreement with Russia. That deal allows grain ships to move safely across the Black Sea without being tangled in Russia's invasion. This week, Russia said it's suspending its participation in that deal. The head of the humanitarian group Mercy Corps is in our studios to talk about this. Tjada McKenna is the Mercy Corps CEO. Welcome to the program.

TJADA MCKENNA: Thank you for having me.

INSKEEP: So who's in danger from this move?

MCKENNA: You know, we all are. This is something that affects the world. Ukraine is a breadbasket. In normal times, it was accounting for 40% of our wheat supplies. The blockade of this food getting out is going to affect food prices worldwide.

INSKEEP: Forty percent - when you say our wheat supplies, do you mean of the world?

MCKENNA: Of the world's wheat supplies were exported through Ukraine in normal times.

INSKEEP: That is astonishing. There are some specific countries, of course, to which the grain goes. What are some of the countries that are on the front lines here of this grain shortage suddenly?

MCKENNA: So it's interesting. Many countries in the Middle East and Africa import - rely on Ukraine for, like, upwards of 90% of their wheat. Under this particular deal, it's going to - all the global markets - like, there's a humanitarian access that's going to places like Yemen and Sudan and Somalia. But the largest purchasers are really China, Italy, Spain, global markets that are just helping - you know, getting their wheat as well.

INSKEEP: It's like oil then.

MCKENNA: Yes.

INSKEEP: A shortage in one place rises the price - raises the price everywhere.

MCKENNA: Exactly.

INSKEEP: I know that you've been to some of the countries that can be affected. And maybe you can help me understand this. I am wondering - so Russia says we're suspending the deal today. I'm wondering how many days, weeks, months, years it takes for that to move through the pipeline and for there really to be a shortage on the ground somewhere?

MCKENNA: Yeah, at the beginning of the war, a year ago, about five weeks after Russia invaded Ukraine, I went to Lebanon, which counts on Ukraine for a vast amount of its wheat and sunflower oil imports. And already, Lebanese people had seen prices on bread and basic staples increase upwards of 50 to 75% in just that short period of time. And this was already an economy and a population that was already suffering immensely.

INSKEEP: Do you think that we could then expect effects that quickly again, a matter of weeks before prices soar in some places?

MCKENNA: You know, I think we'll see. There was so much more uncertainty when the war first started. But we also have to contend with the fact that this war has already decreased supplies in general because Ukraine was such a breadbasket. So we'll see. My fear is that the impacts will be immediate and near. And we're very much hoping that Russia will reverse course here.

INSKEEP: I know your group is also active in Ukraine. What has it been like for Ukrainian farmers to farm in a war zone, to try to get their products out and now to face this uncertainty that they can get their products out?

MCKENNA: It's been devastating, and this is the worst time. July is actually a critical harvest period for Ukrainian farmers. So for those who have chosen to stay and to work in the war zone and to harvest their crops, the idea that they could then sit in bins through this season is heartbreaking and devastating.

INSKEEP: Is it physically possible to store the grain for a while at the ports? Or...

MCKENNA: It is, but it does not last very long. And so - and it also has a long journey ahead of it, so we will see. And that's why we hope that Russia will reverse course quickly.

INSKEEP: Well, let's talk about that. What would you urge the Russians to do? And what would they see as their interests in resuming this deal, do you think?

MCKENNA: I think Russian interests, the things that they're requesting in terms of lifting of sanctions and all types of things, are not going to happen. The reality is this is a conflict that Russia has started with Ukraine. The rest of the world should not suffer. And the other part of this is that, like all things, the people that suffer most are those who are the poorest and in the poorest countries, like people in the Horn of Africa or Yemen, people who are already starving. So really, for Russia, who are they hurting? They're really hurting the poorest people in the world, who have absolutely nothing to do with this conflict.

INSKEEP: Very briefly, is there any alternate source of grain?

MCKENNA: We will - there are alternate sources of grain. But the world and the markets depend on this supply from Ukraine. And so we will see. The war has also impacted fertilizer supplies around the world, too. So we're all - everyone is scrambling to do what they can.

INSKEEP: Tjada McKenna of Mercy Corps in our studio, Studio 31, here at NPR. Thank you so much.

MCKENNA: Thank you for having me, Steve. Transcript provided by NPR, Copyright NPR.