…As Russia-Ukraine Grain Deal remains unfavourable to Africa, writes SIAKA MOMOH
Nigerians may not enjoy cheap bread soon as the Russia-Ukraine conflict continues to rage. This notion is predicated on the geo-politics the Russia-Ukraine Grain Deal is roped in.
According to an informed industry report, since the signing of the deal, around 9.5 million tonnes of grain products have left Ukraine by sea. More than 100 ships have sailed from Ukraine, with 47 percent of the grain shipments going to Turkey and Asian countries, 36 percent going to the EU, and 17 percent to Africa.
Food Prices
Says the Kennan Institute report: “Immediately after the agreement went into effect, food prices fell by 7.90 percent since March 2022. After hitting an all-time high immediately after Russia’s invasion in February, world wheat prices dropped by 14.5 percent and cereal prices dropped by 11.5 percent. Prices for those grains are still higher than they were in 2021, but the deal certainly eased pressure on the market. So, in terms of stabilizing markets, the deal has proved to be effective.
“However, the agreement was not designed to save conflict-affected communities around the world, which for the most part continue to suffer critical food shortages. Particularly, Russia has constantly criticized the agreement, alleging that the grain is not reaching countries that need it the most.
The Grain deal is the initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian ports, also called the Black Sea Grain Initiative. It is an agreement between Russia and Ukraine made with Turkey and the United Nations (UN) during the 2022 Russian invasion of Ukraine.
Prices of bread
Prices of bread have shot up since the Russia-Ukraine conflict began. Prices have gone up between 40 and 100 per cent depending on the ranking of the bakery. Bread loaf that sold for N450/N500 now sells for N700 and N1000. Loaf that sells for N350 now sells for N600. N100/N200 loaves sell for same amount but at reduced size/weight.
And according to Carnegie Politika report, “After several weeks of complaining and wavering, Russia has agreed once again to extend the grain deal with Ukraine, though only for sixty days, instead of another 120-day extension that was due to come into force automatically when the current term ended on March 18. As talks continue on allowing another 120-day extension, Moscow says that the West is not meeting its obligations under the deal, though it is making the claim less loudly and insistently than ahead of the previous extension last October.
“Russia already threatened to tear up the grain deal on the eve of the previous extension last fall, citing a Ukrainian drone attack on a Russian naval base in Sevastopol, which it claimed targeted ships involved in the deal. Putin demanded written security guarantees for naval and civilian vessels operating in the vicinity of the green corridor, but in the end had to settle for verbal assurances from Turkey.”
For Kennan Institute, which claims that the opinion expressed in the report in question here is the author’s, “The most obvious goal is food security. Russia’s invasion of Ukraine caused a surge in global food prices, dealing a heavy blow to countries already at risk of food insecurity.”
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It explains: “Indeed, contrary to popular perception, the majority of grain exports that were shipped out of Ukrainian Black Sea ports didn`t go to the poorest and most needed countries but rather to Europe and Turkey.”
Cassava Bread
Akinwunmi Adesina, erstwhile Nigeria’s Minister of Agriculture and Rural Development who is currently AfDB president, reminds us of our cassava bread scheme of over 10 years ago. Nigeria had plan to introduce 10/20 per cent cassava flour into the production of bread. Industry sources say if the scheme had succeeded, we would have saved N422 billion in foreign exchange. Nigeria spends about N860bn on the importation of wheat annually for the production of bread, cake, and other pastries, according to available industry data. The project died with the exit of Akinwunmi Adesina.
This is an issue of lamentation for Alhaji Abolusodun, Southwest Chairman Association of Masters Bakers and Caterers of Nigeria. He is worried that Nigeria is bedeviled with policy somersault. For him, the Russia-Ukraine Conflict is not the only problem. “It is sad that there is no continuity in government in Nigeria, we are encumbered with poor governance,” he said.
Bakers Challenge
On how bakers are coping with the problem in the industry he said: “It is tough. Price of flour is on the increase. Over 50 per cent of bakers are out of business because they are producing at a loss. On three occasions last year, we had meetings with government in Abuja, they promised to do something but they are yet to do anything. Demand for bread has nose-dived. We pay heavy tax. Diesel is sold at high price. All we can do is put our hope in God.”
Siaka Momoh, Editor, enterprisenow.ng
