Markets are largely shrugging off Russia’s decision to back out of the Black Sea grain deal even as Canada’s government condemned it as a “de facto blockade”..Foreign Affairs Minister Melanie Joly and International Development Minister Harjit Sajjan issued a joint statement Tuesday calling on Moscow to resume its participation in order to avert “further shocks” to global food systems.."Canada calls on the Russian Federation to immediately renew its participation in the agreement to avoid any further shocks to global food systems already strained by its war of aggression against Ukraine,” it said on Global Affairs Canada’s website.."This is a grave escalation of the weaponization of hunger by the Russian Federation.”.Since its implementation, the Black Sea Grain Initiative has relieved pressure on global food prices, preventing more than 100 million people worldwide from falling into extreme poverty..The decision of the Russian Federation will lead to an increase of global food prices, impacting first and foremost emerging economies dependent on food imports, the statement reads..It also impedes the efforts of the World Food Programme, which sourced more than half of its total wheat supply from Ukraine in 2022, relieving hunger in hard-hit areas such as Afghanistan, the Horn of Africa and Yemen..Meanwhile, Russia continues to insist its agricultural exports are being impeded despite record grain exports this season.."Canada will continue to work with its partners to mitigate the impacts of Russia’s war of aggression against Ukraine on global food systems through humanitarian food and nutrition assistance as well as longer-term agriculture and food systems development assistance," Joly said..Russia is the world’s largest wheat exporter, followed by Canada and the US..Roughly 20% of global supplies come from Russia, followed by Ukraine at 6%. Even if the Black Sea ports were to close, land corridors from Ukraine are still open which gives it continued access to markets in Western Europe..Speculation on the impact to Western Canadian farmers as they head into the fall harvest season varies, but markets have hardly budged..According to Jim Beusekom at Marketplace Commodities in Lethbridge, which trades agricultural commodities such as grain, wheat was up barely a percentage point since Friday when it became clear Russia had no intention of renewing the deal..In fact, that may be the reason why it isn’t renewing the deal..“Markets react quickly to news like the Ukraine grain deal and very quickly price in “worse” case situations at the time. At this point its safe to say the market doesn’t care,” he said in an emailed statement. .“So, will it affect Canadian farmers? The market is saying ‘no’ at this point.”
