Ukraine and Russia are both major exporters of foodstuffs and fertilisers. Consequently, Russia’s invasion of Ukraine in February 2022 led to fears of an impending food crisis, particularly in the Middle East and North Africa. Prices did indeed rise steeply in March 2022 as Russia blockaded Ukrainian ports.
Although global food prices remain elevated, they have fallen over the past year. This is partly due to mitigating measures, particularly the Black Sea Grain Initiative (BSGI). However, prices were already high before the war due to the effects of the Covid-19 pandemic.
The BSGI was further extended in March until May 2023 at least. Each deadline gives Russia a new opportunity to press for concessions on sanctions, as Ukraine sorely needs the export revenues, and there is ongoing concern regarding world food prices.
While a continuation of the BSGI is highly preferable, it is also important to note that the initial food crisis fears were somewhat overblown. Russia’s leverage is limited. Higher food prices do take a toll on the poorest, but world food markets also have a high degree of flexibility and thereby resilience. Scuttling the deal would also incur costs for Russia and is therefore unlikely to happen.