The Ukraine grain deal is about to expire — here’s what it means for supply chains

The United Nations-brokered Black Sea Grain Initiative that has allowed Ukraine to safely export 32 million metric tons of food is set to expire on July 18, and serious doubts have been raised as to whether Russia will allow it to continue.

The deal, to date, has facilitated the export of enough food to feed nearly 150 million people for a year, and its expiration would likely exacerbate an already severe global food crisis. While the international community should continue to exert pressure on Russia to extend the agreement, it should also use this as an opportunity to reinvigorate efforts to increase the resilience of food supply chains.

Russia’s full-scale invasion of Ukraine in February 2022 triggered a global food security crisis. Ukraine had historically been one of the world’s largest grain exporters, but the country’s grain production and exports plummeted following the Russian invasion. This contributed to a spike in global food prices and heightened levels of food insecurity in much of the world.

The UN-brokered grain deal — agreed to by Turkey, Russia, Ukraine and the UN in July 2022 — was an important step in addressing the crisis. The deal sought to mitigate the war’s impact on global food security by establishing a maritime humanitarian corridor as well as a registration and inspection scheme to facilitate the export of grain, related foodstuffs and fertilizers from three key Ukrainian ports. Despite the global humanitarian impact, Russia has declared in recent weeks that there are “no grounds” to extend the agreement past July 18.

As important as it is that the grain deal be continued, it is also important for countries to use this as an opportunity to future-proof their food supply chains against the litany of other challenges they face.

The Ukraine war and the food crisis that it has fueled is just one example of how vulnerable global food systems are to disruption. To ensure countries have access to affordable staple foods long after the Ukraine conflict ends, governments should take concerted action to increase the resilience of their food supply chains. Food systems are vast and complex, and improvement is needed broadly, but here are three key steps that can be taken now to achieve concrete results across the food supply chain.

First, countries should take steps to reduce food loss and waste. A staggering 40 percent of all food is lost or wasted across the global food supply chain, which equates to approximately $1 trillion per year. If just 5 percent of that food loss and waste is prevented, an additional 40-160 million people could be fed, which would offset the loss of the grain deal.

One way countries can achieve that goal is by adopting food harvesting and storage strategies that reduce the risk of food being mishandled, left to spoil or made vulnerable to theft. Furthermore, those with the resources to do so can implement monitoring systems that utilize remote sensors to monitor temperature, moisture levels and other conditions that contribute to spoilage, as well as to detect and prevent theft.

Second, countries should strive to increase efficiency and flexibility in their food supply chains by investing in transportation and logistics infrastructure. Public investments in national road networks have been shown to enable more efficient food transportation and reduce costs to consumers. Additionally, countries can minimize the impact of climate change on their ports and other trade-related infrastructure by investing and adapting in mitigating measures, for example by elevating or protecting ports.

Finally, countries should seek to accelerate food supply chains by leveraging digitization, automation and data. Digitizing trade processes can reduce supply chain bottlenecks and reduce operational costs, thereby accelerating trade.

In developing countries, this can be accomplished through accelerated adoption of electronic trade documents, such as bills of lading, in place of cumbersome paper documents. Relatedly, automation and data can be leveraged to better coordinate food imports and exports and enhance existing decision-making processes.

In the U.S., public initiatives such as the Maritime Transportation Data System could create a framework for enhanced visibility of cargo (which has been the standard in airlines and basic delivery logistics for decades) and should be implemented as quickly as possible. Implementing other public and private programs would enable even more advanced solutions to further enhance supply chain resiliency. These initiatives will also help drive standards and accelerate digitization globally.

Regardless of whether the grain deal is extended, its possible collapse — and the severe consequences this could have for global food security — should serve as a wake-up call. The global food supply chains upon which much of the world relies are highly vulnerable to disruption. While investments across the food systems are needed to improve long-term, global food security, attainable actions to improve the supply chains can at least help ensure that access to affordable, staple foods is shielded from the effects of whatever disruptions lay ahead.

Rob Rosenberg is president and CEO of NTELX, Inc. and a nonresident fellow at The Stimson Center, a nonpartisan research center located in Washington, D.C.