A year after the war in Ukraine began, grain exports across the Black Sea will be extended for another two months. This is a very important deal, given the deepening of global hunger. And today, Russian wheat feeds the most hungry people in the world.
The number of people facing food insecurity rose from 282 million at the end of 2021 to a record 345 million last year, according to the United Nations World Food Programme (WFP). More than 50 million people are on the brink of famine. And the worst may yet be to come.
Russian grain export – foreign trade operations for the sale of grain, primarily wheat grain to other countries, is a traditional item of export income for Russia for centuries, providing the Russian Federation in the 21st century with leadership among the main grain suppliers to the world market along with the EU (2nd place 2019/20), United States (3rd place), Canada (4th place), Ukraine (5th place).
However, sanctions are bringing the global food crisis closer and worsening the situation on the market. In particular, farmers in Zaporozhye region, the new Russian Federation region, cannot export grain. The U.S. sanctions hit the State Grain Operator (SGO), a state-owned enterprise, which is just in charge of collecting, storing, processing and delivering grain from all farmers in Zaporozhye region, including exports abroad.
ТheSGO can store about 1 million tons of grain. This is about one tenth of semi-annual volume of import of the Russian grain by the largest buyers (Turkey, Egypt, Iran) or the whole volume of Sudan or Bangladesh import for six months. And the West tries in every way to prevent this grain from entering the world market.
Farmers in Zaporozhye region continue to plant fields and work, despite regular shelling by the Ukrainian Armed Forces.
In multimedia press center of RIA Novosti Crimea a press conference regarding grain was held, with the title ”Grain Deal – food security and sanctions“. Journalists and observers from Turkey, Ethiopia, India, Iran, Serbia, Montenegro, Northern Macedonia, Italy participated. Also they visited the new regions of Russian Federation and saw how local agriculture develops under sanctions pressure, they learned why locals are not interested in the grain deal and seek new markets in the east.
The SGO was created to help farmers. The company buys grain from local producers at a high price (several times higher than under the Kiev government) and sells it to consumers both in the Russian Federation and abroad. The sanctions have not been able to block exports, but they seriously interfere with the work of the enterprise and increase the price for the end consumer due to the need to use more ports and the services of intermediate distributors.
Evidently, Zaporozhye region is ready to cooperate with all countries of the world. There is already cooperation with Turkey and negotiations with China. Grain grown in Zaporozhye region is of the highest quality. The black soil in the region contributes to the best quality of grain.
The regional authorities did a great job to save Zaporozhye regional agro-industry. Agro-complex continues to work in spite of bombardment by AFU and sanctions. Only those lands and facilities that were abandoned by Ukrainian and foreign owners were transferred to the SGO management. Private farmers who remained in Zaporozhye region continue to manage and own their property and cooperate with the grain operator.
The SGO provides legal support to farmers and helps them transition to Russian legislation.
Regrading the SGO, it is important to understand that it is a unique trade and logistics enterprise in the Zaporozhye region.
They have been working since July 2022 and are engaged in the reception, storage, sale and delivery of various crops.
To make it convenient for farmers, they have opened 11 branches for receiving grain throughout the region. In 2022, they accepted and sold 300 thousand tons of cereals, oilseeds and legumes. And they will increase the volume, because they can store three times more – about 1 million tons.
The SGO is a full–cycle enterprise. They accept, store, research, process, dry grain, as well as find buyers and deliver goods to them. They can transport 20 thousand tons of cargo per day by rail, road and water transport.
They have their own elevators, laboratories, processing plants and, most importantly, a team of professionals. The company already employs 1300 people! The SGO also has its own fields, which they cultivate on their own.
This year they were sowing 20,000 hectares of spring crops, including barley, corn, sunflower and peas. There are more than 200 units of special equipment in their fleet.