An agreement between Kyiv and Moscow aimed at facilitating the export of Ukrainian grain has led to a reduction in food prices, a UN official involved in the talks said, describing the agreement as “successful”.
But the head of the United Nations Agency for Trade and Development (UNCTAD), Rebecca Greenspan, stressed that now it is necessary to reduce prices for fertilizers, the main producer of which is Russia, in order to avoid a food crisis.
On July 22, under the auspices of the UN, two agreements were signed allowing, on the one hand, the war-interrupted export of Ukrainian grain, and on the other, the export of Russian food and fertilizer, despite Western sanctions against Russia.
The agreement will be valid for “120 days”, that is, four months.
On the occasion of the presentation of the annual report of the Trade and Development Organization, Greenspan said: “The United Nations looks forward to it being updated because it has indeed proven to be a successful and important addition to addressing the global food crisis.”
“Now we have crossed the threshold of 5 million tons of grain leaving Ukrainian ports. This has undoubtedly affected the grain markets,” she explained.
According to UNCTAD, this Black Sea grain initiative was agreed to have had a “significant impact” on lowering world food prices.
The FAO Food Price Index fell in August for the fifth consecutive month, reaching its lowest level in seven months.
“We are at pretty pre-war price levels in Ukraine,” Greenspan said, noting that prices were already very high even before the Russian invasion.
She called for “continued pressure” to keep food prices falling.
The UN representative, former vice president of Costa Rica, called the markedly high prices for fertilizers another major obstacle to the normalization of the food market.
The price of synthetic fertilizers (nitrogen, phosphate or potash) has tripled in a year and a half after supply disruptions from Russia, the world’s largest exporter, and high prices for the gas needed to produce them.
Russia, the world’s largest grain producer, for its part, complains about the inability to sell its products and fertilizers due to Western sanctions that have affected, in particular, the financial and logistics sectors.
“We must lower fertilizer prices to avoid a crisis in the future,” the official said.
A meeting of fertilizer producers is scheduled in Paris ahead of the G20 summit (Indonesia) in November to ramp up production.