Mountains of grain left to rot as Vladimir Putin ‘blackmails the world’

Silos and containers on the dockside at the Port of Odesa in Ukraine cannot be shipped as the war continues - Nathan Laine/Bloomberg
Silos and containers on the dockside at the Port of Odesa in Ukraine cannot be shipped as the war continues - Nathan Laine/Bloomberg
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From his seafront offices in the port city of Odesa, shipping logistics boss Viktor Berestenko looks out on Ukraine’s biggest and busiest shipping port. Or at least he used to.

“Take a look out that window there,” he says, pointing at a terminal where shipping containers are piled like Lego bricks across an area the size of several football pitches. “Do you see any ships coming from there? No. That is the biggest terminal in Ukraine - and it is the same situation with every other terminal in the country.”

The emptiness of the sea around the port is matched by the emptiness of the office Mr Berestenko stands in. Since Vladimir Putin’s invasion of Ukraine three months ago, when Russian warships blockaded Odesa and other Black Sea ports, the 112 employees of his firm, Inter Trans Logistics, have been unable to work. Nor have any of the hundreds of other freight forwarding workers in town.

Viktor Berestenko's shipping logistics firm has been out of business since Russian warships blockaded Odesa - Colin Freeman
Viktor Berestenko's shipping logistics firm has been out of business since Russian warships blockaded Odesa - Colin Freeman

Such firms are used to working in challenging conditions, their trade being forever at the mercy of the oceans.  But nobody wants to risk being shelled by Mr Putin’s navy - or running into one of the sea mines that have been laid around the port.

In any country, anywhere that sells its goods by sea, this situation would spell disaster. But in Ukraine, it spells disaster for the rest of the planet too. For Ukraine is one of the world’s largest providers of food crops - in particular, supplying wheat to poverty-stricken parts of Africa and Asia.

It quite literally provides the poor nations of the world with their daily bread - without which their populations can either starve, riot or overthrow their governments.

In normal circumstances, some 3,000 container loads of grain arrive by train every day at Odesa and other Ukrainian ports, where they are stored in vast silos. Since the outbreak of war in February, though, most of that grain has simply been piling up - around 25 million tonnes at Odesa’s port alone.

The stoppage has already fuelled a surge in world wheat prices of nearly 45 per cent, and if not shipped out soon, the wheat will eventually rot.

Russian forces, meanwhile, stand accused of deliberately sabotaging what is left of Ukraine’s food production capacity. Across the country, silos have been bombed, cattle slaughtered by artillery fire, and farm infrastructure wrecked.

Some of the destruction, no doubt, is simply collateral damage from the wider havoc wreaked by the war. But Ala Stoyanova, the deputy governor of Odesa, points the finger of blame directly at Mr Putin, who has refused to heed international calls so far for an end to the port blockade. Not that she cares to call him “Mr” any more.

“I won’t call him Mr Putin, and I would recommend that you don’t either,” she told The Telegraph in an interview at her offices in Odesa, which have been relocated to reduce the risk of being targeted by Kremlin missiles.

“It is his aim, I think, to make these poor countries starve from hunger without this grain. When he blocks our ports, by this means he is blackmailing the world.”

It is a sobering assessment - not least because Russia under Communism styled itself as the champion of the world’s poor. But it is not just Africa that has to worry, she says. For where food shortages and famines prevail, and where governments fall, people will inevitably flee - fuelling, she fears, a repeat of the migrant crisis of 2015 that saw millions trying to reach Europe from sub-Saharan Africa.

“You already have a refugee crisis in Europe with people fleeing there from this war in Ukraine,” she said. “You may now get a refugee crisis from hunger in third countries too.”

Her warnings may sound apocalyptic - yet no more than those of the Bank of England governor Andrew Bailey, who used that very word this week when he warned that the Russian blockade could lead to famines worldwide.

“That is a major worry, and it is not just a major worry for this country, it is a major worry for the developing world as well,” he said. “Sorry for being apocalyptic, but that is a major concern.”

The comments by Mr Bailey - who like most central bankers normally measures his words carefully - reflect an awareness among world leaders that the Ukraine food crisis could not have come at a worse time for the developing world. As well as the aftershocks of the Covid pandemic, inflation rates and oil prices are already rising, and parts of Africa are gripped by drought.

No space to store crop

Ukraine is doing its best to address the crisis, mindful that its own agricultural workers’ livelihoods are in jeopardy too. Its farmers are a resourceful bunch, and have already been celebrated in the war for using their tractors to tow Russian tanks off the battlefield when they run out of fuel.

Many have continued to farm despite being near frontlines, some even wearing flak jackets when ploughing. “Russian aggression continues mostly against big cities, but less so in the countryside where the planting goes, so we expect to plant 90 per cent of our fields as normal,” said Ms Stoyanova.

The problem, though, is in getting their product to market. A new harvest is due in July and August, and already there is diminishing room available to store it. Efforts to try to transport some of the rising grain mountains in Odesa into neighbouring Romania and Poland by land face formidable difficulties.

Trains and trucks, at best, can only carry a fraction of the volume of today’s giant cargo freighters. And European railways also operate on a different gauge - leading to lengthy hold-ups at the border while cargos are transferred laboriously from one train to another.

“We normally export 160 million tonnes of cargo by sea and 90 million by train and truck,” said Mr Berestenko. “Now we’re having to do it all by land, and it’s just not possible. It’s not just our infrastructure that isn’t up to it, it’s our neighbours’ infrastructure too.”

Even if the Ukrainian grain could be transported through Europe, though, it then has to reach its end customers - most of them in politically fragile nations in Africa and the Middle East.

Egypt and Lebanon, for example, get more than half of their wheat from Ukraine, while other big customers are Somalia, Indonesia, Pakistan, Bangladesh and Sudan. The World Food Programme also buys 50 per of its contingency grain supplies from Ukraine.

According to the Famine Early Warning System (Fews), the war has heightened the risk of food shortages in Nigeria, Yemen, and the Horn of Africa. Somalia is particularly at risk, after an intense three-year drought.

Last month, Britain’s ambassador to Mogadishu said that more people could die there than in the country’s devastating famine of 2011, which claimed an estimated 260,000 lives.

The past decade has shown, moreover, that hungry people do not meekly accept their fate. Rising food prices were a background factor in the Arab Spring revolutions, and also fuelled the 2018 uprising in Sudan that unseated dictator Omar al-Bashir. While few were sad to see him depart, even fewer would argue that the world needs more instability right now.

“There is a rule of thumb that if the price of wheat goes up 40 per cent, then governments can start getting into trouble,” says Alex de Waal, an expert on humanitarian crises, and executive director of the World Peace Foundation in Boston.

“We saw this with the Arab Spring and also the uprising in Sudan in 2018, where the protesters used bread as a symbol and said ‘down with rule of thieves’. They were half right - the government was indeed a corrupt, thieving one, but the international price of wheat was something it had little control over.”

Risk of nations stockpiling food

So might we see a new outbreak of “Bread Revolutions”? Or worse still, “Bread Wars”? This is not a foregone conclusion, says Mr de Waal. The international community has learned lessons from discord sown by the global food prices of 2008-11, he says, and should be on guard this time to stop it happening again.

The real problem, he says, is not shortages per se - Ukraine, after all, still provides only around 10 per cent of the world’s wheat, which can be made up by increased production elsewhere. Instead, it is the risk of price rises caused by countries stockpiling emergency supplies.

Such panic-buying then puts food out of reach for the world’s poorest, whose governments are often least able to subsidise them.

Already, though, some nations are hoarding. India has banned exports of its own wheat, while Indonesia, the world’s top palm oil exporter, announced last month, in response to uncertainties over sunflower oil supplies from Ukraine, that it would no longer export its own palm oil supplies.

“There is more international oversight of this these days, with governments making efforts to avoid commodity price spikes,” he said. “But if there was yet another shock to the system, countries may easily just say ‘enough is enough’ and start hoarding to protect themselves. It is easy to say the politicians shouldn’t do that, but they’re the ones who have to deal with the protests if prices rise.”

International aid system is strained

Subsidising food for the very poor can help offset the worst effects, adds David Laborde, senior research fellow at Washington's International Food Policy Research Institute. But he added: “That, by definition, costs money, and many poor countries don’t have that much money to spend after Covid-19.”

Nor is the international system that might normally bail such countries out in good shape either.

Mr de Waal points out that far more countries are now in humanitarian crisis compared to 15 years ago, putting the international aid system under far more strain than it used to be.

The global recession of 2008, the bloody aftermath of the Arab Spring, the spread of jihadism into the Sahel region, Ethiopia's new civil war and last year's Taliban take-over in Afghanistan have led to far more countries ending up in urgent need.

“Between 2008-11 there was only one humanitarian emergency, which was the famine in Somalia,” he said. “Now the World Food Programme has 10 countries on the emergency list, including Afghanistan and Yemen, Sudan, Ethiopia, Somalia, and the Congo.

The WFP appeals for those countries have attracted less than 20 per cent of the money they need, while the WFP’s operating costs have gone up 44 per cent in the last year because of food and fuel cost increases.”

Weaponising the threat of famine

So what is to be done?  The World Food Program has asked Washington, which is one of its biggest benefactors, for $5 billion in additional international food assistance. Ministers from the G-7 group, meanwhile, are seeking to build “agricultural solidarity lanes” to get grain fast-tracked to those countries in greatest need, amid warnings that up to 50 million people will start feeling shortages in coming months.

International pressure is also intensifying on Russia to ease its blockade of Odesa and other ports so that food shipments can come and go. Diplomats believe a precedent has already been set in terms of agreements to allow civilians and Ukrainian soldiers to exit the besieged port of Mariupol.

But no such agreement is in place yet, and with every week that passes, Ms Stoyanova’s theory that Mr Putin is weaponising the threat of famine gains new and powerful backers.

Among them is Annalena Baerbock, Germany’s Foreign Minister, who last week broke with her country’s long-standing habit of giving Mr Putin the benefit of the doubt.

“We must not be naive,” she said. “It is not collateral damage, it is an instrument in a hybrid war that is intended to weaken cohesion against Russia’s war.”

For Ukrainians, it also carries chilling echoes of the past. During Soviet rule in the 1930s, Joseph Stalin deliberately starved Ukraine by collectivising farms and seizing Ukrainian grain, leading to millions dying in a famine remembered today as the Holodomor.

He never faced punishment for his crimes against the food supply - but some believe that it could form one of the charges against Mr Putin were he ever to face prosecution by the Hague.

“The crime of starvation in law does not require you to prove that people died - just that they were deliberately deprived of food,” said Mr de Waal. “Ukraine today may not be quite like the Holodomor of the 1930s, but with international prosecutors now in Ukraine, it could be of potential interest to them.”