China’s the top importer of Ukrainian grain, and could save the Black Sea deal

WASHINGTON — The United States and its Western allies are looking to China to help resolve the calamitous domino effect of Russia’s exit from a crucial U.N.-backed agriculture deal.

China, one of Moscow’s most strategic allies and the world’s second-largest economy, was the indisputable top recipient of Ukrainian agricultural products under the landmark agreement known as the Black Sea Grain Initiative. After nearly a year in place, Russia ditched the pact last month, citing frustrations that the deal only benefited Ukraine.

The agreement eased Russia’s naval blockade in the Black Sea and established a maritime humanitarian corridor which saw the passage of more than 1,000 ships carrying nearly 33 million metric tons of Ukrainian wheat, barley, corn and sunflower meal.

Since the inception of the July 2022 deal, which was brokered nearly six months into Russia’s full-scale war, Chinese ports had welcomed 8 million metric tons of Ukrainian agricultural products, the lion’s share according to data provided by the United Nations.

“China is the biggest buyer of Ukrainian grain and so with the breakdown of the Black Sea Grain Initiative, the pressures on Beijing are going to be extreme in terms of food price inflation,” David Riedel, founder of Riedel Research Group, said in an interview with CNBC.

“They may have been stockpiling a little bit ahead of the breakdown in that agreement but that’s a stockpile of weeks not months,” he said. “I would be very concerned about food price inflation in China,” Riedel added.

Read more: Black Sea grain deal collapse could be the catalyst for China to take stimulus action

U.S. Ambassador to the U.N. Linda Thomas-Greenfield told reporters on Tuesday that the Biden administration will prioritize the world’s mounting food crisis triggered in part, by the collapse of the Black Sea Grain Initiative. The U.S. will have an opportunity to do so at the helm of the United Nations Security Council, a scheduled, one-month-long rotating presidency.

“We know food security is national security,” Thomas-Greenfield said, adding that “Russia has launched a full-scale assault on the world’s bread basket and it is dead set on depriving the world of Ukraine’s grains.”