Suspension of grain agreement may lead to 10-15% increase in wheat prices – IMF

The International Monetary Fund on Wednesday said the suspension of the grain agreement, which ensured the export of grain and other agricultural products from Ukraine amid ongoing conflict with Russia, could lead to a 10-15 percent increase in the price of wheat. 

 

It said about 33 tons of wheat had been exported from Ukraine to the rest of the world in a year, which helped to reduce the pressure on food prices.

 

Russia left the deal on July 18. Based on the agreement reached in July 2022, brokered by the United Nations and Turkey, Ukrainian wheat and other agricultural products were exported via the Black Sea, including to poor countries in Africa and Asia.

 

On July 17, the Ministry of Foreign Affairs of Russia stated that the grain agreement had failed to fulfill its humanitarian purpose. 

 

In exchange for maintaining the agreement, Russia demanded the operation of the Tolyatti-Odessa ammonia pipeline, the restoration of the supply of agricultural machinery and its parts, the entry of Russian ships into foreign ports, the unblocking of transport logistics and the return of Rosselkhozbank to the international tax system SWIFT. 

 

Russia claimed it was unable to export food and fertilizers, which Western countries called a lie, as these products have not been sanctioned on the backdrop of the war. Ukraine and the West have accused Russia of using food as a weapon.