Global grain prices could increase as much as 15% after Russia pulled out of a deal that allowed Ukraine to safely ship its grain through ports on the Black Sea, the International Monetary Fund’s chief economist said.
“It’s very clear that the Black Sea grain initiative was very instrumental in making sure that there will be ample grain supply to the world in the last year,” Pierre-Olivier Gourinchas told reporters Tuesday. “The same mechanics work in reverse and it’s likely to put upward pressure on food prices.”
While the IMF is still assessing its forecasts on the effects of Russia’s action, a range of a 10% to 15% increase in prices of grains “is a reasonable estimate,” Gourinchas said.
Russia ended the Ukraine grain-export deal last week — almost a year into the agreement — heightening uncertainty over global food supplies and escalating tensions in the region. The move jeopardizes a key trade route from Ukraine, one of the world’s top grain and vegetable oil shippers, just as its next harvest kicks off.
On Monday, wheat and corn prices surged after Russia attacked one of Ukraine’s biggest Danube river ports, ramping up the risks facing Kyiv’s last major grain export route and global food trade.
