IMF Warns of Sharp Increase in Grain Prices
TEHRAN (Tasnim) - Global grain prices may experience a substantial 15% surge as Russia chose not to renew the Black Sea Grain Initiative, according to Bloomberg, citing the IMF's chief economist.
Pierre-Olivier Gourinchas stated that the now-terminated Black Sea Grain Initiative played a crucial role in ensuring sufficient grain supply in the past year. He warned that its expiration is likely to exert upward pressure on food prices, RT reported.
While the IMF is still assessing the potential effects of Russia's decision, Gourinchas estimated a reasonable increase in grain prices between 10% to 15%.
The agreement, facilitated by the UN and Turkey, was initially signed in July 2022 and subsequently extended several times until it was due to expire on July 17. It provided a secure trade corridor for exporting Ukrainian grain through Black Sea ports. Additionally, a Russia-UN memorandum aimed to facilitate Russian agricultural exports, which, although not directly targeted by Western sanctions, have faced challenges due to the sanctions.
Last week, Russia declined to extend the agreement, citing the West's failure to fulfill its obligations, including the alleviation of economic restrictions that hindered the export of Russian food and fertilizers.
Moscow criticized the grain deal for not meeting its humanitarian justifications, pointing out that most of the Ukrainian products were sent to wealthier nations rather than the poor countries most vulnerable to food insecurity.
Despite the exit from the agreement, Moscow stated on Tuesday that the grain deal could be revived if the promised sanctions relief from the UN is received.
