Kerch Strait warning, a call for vigilance, Pg14

Key Highlights:

• The FAO’s benchmark food price index reached an all-time high in March 2022 following Russia’s full-scale invasion of Ukraine.
• Fears of a global food crisis have revived due to escalating strikes on ports, grain terminals, and cargo vessels across the Black Sea, Kerch Strait, and Sea of Azov.
• Operations in the Greater Odesa port complex, which handles about 90% of Ukraine's agricultural produce exports, have been effectively halted.
• Over 80% of Russia’s grain exports move through ports on the Sea of Azov and the Black Sea, which have also been targeted by Ukrainian attacks.
• Russia and Ukraine collectively account for nearly 30% of the world's wheat exports, along with significant shares in corn, barley, and sunflower oil.

Global Food security.jpg

Detailed Insights:

• The intensified tensions in the Black Sea region now pose a greater threat to agricultural trade than the conflict in West Asia.
• The period of relative calm and gradual resumption of grain shipments, facilitated by the Black Sea Grain Initiative, was shattered after its termination in July 2023.
• The paralysis of export trade from this region could lead to a global food supply crisis similar to that experienced in 2022.
• Supply shocks can spread across commodities; for instance, scarcity of sunflower oil can drive up prices of substitutes like soybean and palm oil.
• Global food security risks are magnified by the interaction of ongoing conflicts, such as the Russia-Ukraine war and the US-Iran tensions, and adverse weather phenomena like El Nino and European heatwaves.
• The Kerch Strait is a vital maritime passage connecting the Black Sea and the Sea of Azov, crucial for Russian and Ukrainian trade.
• The Modi government has been credited with insulating Indian consumers and farmers from shortages in transport fuels, LPG, LNG, and urea triggered by the West Asia conflict.

Key Concepts Involved:

• FAO Food Price Index: A measure of the monthly change in international prices of a basket of food commodities.
• Kerch Strait: A narrow strait connecting the Black Sea and the Sea of Azov, strategically important for maritime access and trade.
• Black Sea Grain Initiative: A UN-brokered agreement that allowed for the safe export of grain and foodstuffs from Ukrainian ports during the conflict.
• El Nino: A climate pattern characterized by the unusual warming of surface waters in the eastern tropical Pacific Ocean, impacting global weather.