The collapse of the Black Sea Grains Initiative will not have an immediate impact, but in the medium term it will create a strain on the world food market. (Source: AP)

Experts say the current situation is quite different from February 2022, when Russia launched a special military operation in Ukraine, cutting off shipping in the Black Sea - the main export route for Ukrainian agricultural products. As the world's leading exporter of sunflower oil and the fourth-largest exporter of wheat and corn, Kiev's withdrawal from the global market pushed food prices to record highs in May 2022.

The subsequent opening of the Black Sea grain export corridor on August 1, 2022, helped secure supplies for importing countries and helped ease the food crisis, even as Ukraine's agricultural output fell due to the impact of the conflict.

Wheat production is forecast to fall to 17.5 million tonnes in 2023-24 from 33 million tonnes in 2021-22. Corn production is forecast to fall to 25 million tonnes from 42 million tonnes.

Mr. Gautier Le Molgat, analyst at Agritel - a company specializing in providing data and analysis on the agricultural market, forecasts that in the 2023-2024 crop year, Ukraine will export 6 million tons less wheat and 10 million tons of corn and the future of the food market will be clear by the end of the harvest.

“This could be a quiet period in the market, with little reaction to the news of the suspension of the agreement,” Molgat said. Currently, wheat prices are rising slightly in Europe and falling in the US market.

Russia’s refusal to extend the agreement was also expected. Edward de Saint-Denis, a trader at commodities trading firm Plantureux & Associes, said that in recent months his company had observed a bottleneck in the Bosphorus Strait with traffic slowing down, especially due to the low number of Russian inspectors on ships passing through the passage.

Even before the Black Sea corridor opened, the EU had created “solidarity routes” – land and river routes designed to facilitate the export of EU agricultural products through European countries. The Farm Foundation, a think tank specializing in agricultural issues, estimates that half of Ukraine’s agricultural exports already travel along these routes.

There is no shortage of wheat in the global market at the moment. However, “the most exportable wheat is from Russia, which has 12.5 million tonnes of reserves and is the cheapest wheat in the world,” said Damien Vercambre, head of commodities brokerage Inter-Courtage.

Russia could ease some of any shortages of Ukrainian wheat. But growing food dependence on Russia could be a bitter pill for many countries.

The EU is expecting a normal harvest, which could also help meet the needs of importing countries. But adverse weather could quickly change the outlook.

The wheat and corn markets are also in very different places right now. China, the world’s top corn importer, may turn to Brazil, which has a record harvest and is selling at lower prices.

For wheat, production may be adequate, but a decline in Ukraine could have a significant impact. “A prolonged closure of the Black Sea corridor will have an impact on food price inflation, which in turn will affect food security,” said Olia Tayeb Cherif of the Farm Foundation.

Some importing countries are starting to struggle to pay current prices, for example Egypt.

The UN World Food Programme is also at risk of disruption because it sources wheat mainly from Ukraine to supply Afghanistan, Yemen and African countries, Mr. Cherif noted.