All eyes on the Black Sea in the face of a looming food crisis

With its Black Sea ports under blockade, Ukraine’s grain silos are brimming with millions of tons of cereals, with no way of being exported. Meanwhile, developing countries dependent on grain from Ukraine face a looming food crisis. Between January and April this year, Ukraine’s exports plunged 58% y/y in terms of volume – meaning that during the period the world was shy some 7% of its normal trade levels of cereals, 3% of sunflower oil, and 2.2% of ferrous metals. And since then, the shortage has only grown.

What you will learn:

• While Ukraine’s agricultural output may not be seeing any shortage of stock – in fact, it had a bumper harvest in 2021 – metals output contracted by 60% in H1, half of which might be permanent due to the Russian occupation Mariupol and the destruction of its two large metal works.

• Turkey’s effort to mediate a deal that would see Russia lifting the blockade of Ukraine’s seaports in the Odesa region could be significant.

• But we doubt the deal can succeed in its current form.