The United States Agency for International Development has cautioned Nigeria and other African countries to prepare for higher food prices following recent events that briefly halted Ukraine’s food exports to African nations.
The deputy administrator for policy and programming at USAID, Isobel Coleman, made this statement on Thursday during a virtual press conference.
She claimed that the decision by Russia to leave the Black Sea Grain Initiative has already started to raise food costs globally.
She observed that developing countries that were dependent on imports and had traditionally relied on grain imports from Ukraine would be disproportionately affected by this increase in food prices.
The invasion of Ukraine by Russia in February 2022 cut off all grain shipments by sea from Ukraine, which had previously been a major exporter via the Black Sea.
Additionally, Russia temporarily outlawed grain exports, making the situation worse. Global food prices increased as a result, endangering famine in emerging nations like Nigeria and Sudan, among others.
A compromise between Russia and Ukraine was mediated by Turkey and the UN in July 2022, allowing cargo ships to travel through a 310 nautical mile and three nautical mile corridor in the Black Sea.
The agreement allowed for the export of about 33 million tonnes of grain from Ukraine, which led to a 20% decrease in global food prices, according to the UN’s Food and Agriculture Organisation.
On July 17, 2023, Russia put an end to the historic peace agreement that had allowed grain to travel from Ukraine to countries in Africa, the Middle East, and Asia, claiming international sanctions as a roadblock to agricultural exports.
The Black Sea Grain Initiative will be put on hold, according to Kremlin spokesman Dmitry Peskov, until conditions are satisfied for supplying the rest of the globe with Russian grain and fertilizer.
As one of the largest breadbaskets in the world, Ukraine is a significant producer of crops like sunflower oil, barley, maize, and wheat.
Wheat prices have risen significantly on both the European and US wholesale markets as a result of the deal’s termination, which has already had a significant impact on global food markets.
Prior to the conflict, Ukraine exported between 16 and 21 million tonnes of wheat and between 25 and 30 million tonnes of maize annually, primarily via the Black Sea.
In an effort to keep food costs down and prevent starvation in target nations, Ukraine’s President Volodymyr Zelensky stated that the nation will discover alternate methods to reach Africa and Asia.
Food inflation in Nigeria has reached an all-time high, rising by 43 bps from May to June to 25.25% (a record high).
“We believe that the Black Sea Agreement withdrawal by Russia, together with recent policy changes like the devaluation of the Naira and the elimination of the PMS subsidy, plus the ongoing insecurity issues that continue to damage local food production, suggest that food inflation may get worse in the months to come.”
