The world grain trade and sea logistics’ risks: current state and dynamics

Husenko Olha
senior lecturer at the International Economic Relations’s Department, Odesa National Economic University, Odesa, Ukraine, E-mail:olgagusenko@ukr.net, ORCID ID: https://orcid.org/0000-0003-4605-2605

Cite this article:

Husenko O. (2024) The world grain trade and sea logistics’ risks: current state and dynamics. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Svitova torhivlia zernovymy kulturamy ta ryzyky morskoi lohistyky: suchasnyi stan ta dynamika; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 3-4 (316-317), pp. 176-182.

Abstract

The paper’s aim is to analyze the world grain trade’s current state and dynamics and assess the impact of sea logistics risks. The full-scale russian invasion came at a bad time for global food markets, as food prices were already high due to complications in seaborne grain logistics caused by the COVID-19 pandemic, high global demand and low harvests in some countries. If the russian aggression continues beyond 2024, the global food crisis will worsen, creating a challenge for many countries, especially those that rely on food imports, such as the countries of the Middle East and North Africa. The paper analyzes world grain prices before and after signing the agreement on the Black Sea Grain Initiative. In July 2023, russia withdrew from the Black Sea Grain Initiative. Until that time, 40% of Ukrainian grain was transported through Black Sea ports, and 60% went overland through the "solidarity lanes". After russia's withdrawal from the Initiative, exports from Ukraine decreased again, and prices increased. A positive forecast of the world harvest is currently stabilizing prices. But the world's food supply remains precarious, as the war and Russia's blockade of Black Sea ports significantly reduce Ukraine's ability to export grain and food products to the world market. The global production of grain crops by world region is analyzed. The current state and dynamics of the global export and import of grain crops are determined. The geographical structure of world grain trade is analyzed. The impact of sea logistics risks in the export of grain crops is evaluated. Recent Houthi attacks on commercial vessels in the Red Sea have severely affected shipping through the Suez Canal. The Red Sea crisis compounds the ongoing disruptions in the Black Sea due to the war in Ukraine, which have resulted in shifts of grain trade routes and altered established patterns.

Keywords

world grain trade, global food security, COVID-19, russian full-scale invasion, the Black Sea Grain Initiative, world grain prices, sea logistics, attacks of the houthi rebels on vessels.

JEL classification: F190; F290; Q170; DOI: https://doi.org/10.32680/2409-9260-2024-3-4-316-317-176-182

UD classification: 339.5:330.3

References

1. Nechyporuk A., Kotova M., Kochubei D. (2023) Eksport Ukrainy v umovakh voiennoho stanu [Exports of Ukraine under martial law]. Zovnishnia torhivlia: ekonomika, finansy, pravo. № 5. S. 18-32. Seriia. Ekonomichni nauky. Retrieved from: https://journals.indexcopernicus.com/ api/file/viewByFileId/1855025 [Іn Ukrainian].
2. Ahn, Soojung, Dongin Kim, and Sandro Steinbach (2023). The impact of the Russian invasion of Ukraine on grain and oilseed trade. Agribusiness, 39.1, 291-299. Retrieved from: https://onlinelibrary.wiley.com/doi/10.1002/agr.21794 (accessed 25.02.2024)
3. FAO Cereal Supply and Demand Brief. Retrieved from: https://www.fao.org/ worldfoodsituation/csdb/en/ (accessed 25.02.2024)
4. How the Russian invasion of Ukraine has further aggravated the global food crisis. Retrieved from: https://www.consilium.europa.eu/en/infographics/how-the-russian-invasion-ofukraine-has-further-aggravated-the-global-food-crisis/ (accessed 25.02.2024)
5. FAO. 2023. Food Outlook – Biannual report on global food markets. Food Outlook, November 2023. Retrieved from: https://www.fao.org/3/cc8589en/cc8589en.pdf (accessed 26.02.2024)
6. Aktualni problemy morskoi lohistyky: Monohrafiia (2023) [Actual problems of maritime logistics: Monograph]. Za zahalnoiu redaktsiieiu prof. M.Ia. Postana ta prof. O.O. Balobanova. Odesa: ONMU. Retrieved from: http://visnyk.onmu.odessa.ua/up/mn1.pdf (accessed 27.02.2024) [Іn Ukrainian]
7. Lohistyka maibutnoho: efektyvni rishennia dlia torhivli (2023). [Logistics of the future: effective solutions for trade]. Tezy dop. Mizhnar. nauk.-prakt. internet-konf. (Kyiv, 20 kvit. 2023 r.) / vidp. red. N. B. Ilchenko. – Kyiv: Derzh. torh.-ekon. un-t. 239 s. Retrieved from: https:// knute.edu.ua/file/MzEyMQ==/070aaa1a3dddd01c87014c1ec2fb41f7.pdf (accessed 29.02.2024) [Іn Ukrainian]
8. Navigating troubled waters: Impact to global trade of disruption of shipping routes in the Red Sea, Black Sea and Panama Canal. Retrieved from: https://unctad.org/system/files/officialdocument/osginf2024d2_en.pdf (accessed 24.02.2024)
9. Iemenski khusyty vbyvaiut torhivliu. Chym zahrozhuie konflikt u Chervonomu mori? [The Yemeni Houthis are killing trade. What threatens the conflict in the Red Sea?] Retrieved from: https://www.epravda.com.ua/publications/2024/01/15/708730/ (accessed 01.03.2024) [Іn Ukrainian]