A little more than three weeks after Russia terminated the grain deal with Ukraine brokered by Turkey and the United Nations,  calm is still largely prevailing on the global grain markets.

That there were no unwanted surprises is due to the fact that the international grain markets have been dealing with the war situation for a while, explained Thorsten Tiedemann from the Hamburg grain trading company Getreide AG.

"It was always clear that the grain agreement was being questioned by the Russian side. Its collapse is not a complete surprise to the market. Many people are now preparing for alternative export routes," Tiedemann, who used to be a trader at the Chicago Board of Trade in the United States, told DW.

"At the moment, Russia is still exporting a lot of wheat. Whether this continues, we have to wait and see. After all, Russian ports have also been declared high-risk areas over the past weekend," he added.

How secure are Russian grain exports?

It is harvest time across the northern hemisphere, and there is enough grain available to meet demand. Additionally, major grain-importing countries have increased their stockpiles. 

Ali Al Moselehi, Egypt's minister of supply and international trade, was quoted by Reuters news agency as saying that "Egypt is capable of diversifying its purchases, and its wheat reserves are sufficient for 5.2 months at the moment."

According to the minister, the Egyptian government has purchased 3.8 million tons from local farmers and made purchases from more than 20 countries, including France, Bulgaria, the US, India and Romania.

Turkey doesn't foresee any shortages, either. Turkish wheat producers expect to increase production by 3.8% to 20.5 million tons this year, despite a decrease in cultivation areas.

Gursel Erbap, CEO of Doruk Un, a major supplier to the United Nations World Food Programme (WFP), told DW that global inflation would translate into more profits for Turkish farmers.

According to Hasan Hacihaliloglu, CEO of grain and food company Taban Gida, his company has already begun exporting durum wheat and corn. Taban Gida has a market share of around 20% in Turkey and supplies wheat, other grains, feed and oilseeds to nearly 20 countries worldwide.

Effects of the Russian war on importers

But since the Russian war against Ukraine began, many traditional grain-importing countries have reduced wheat consumption due to high prices, said Tiedemann.

"Poor countries with weak currencies seem to have difficulty importing grain," he said.

Other global market players, like the WFP, have used the decline in prices after the records reached the previous year to increase their stockpiles. According to WFP's Brenda Kariuki, around 80% of wheat reserves for East Africa have already been procured.

In an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung, Kariuki said WFP would be able to source enough grain from other countries in the future, at higher prices if necessary.

In East Africa, more than 23 million people are affected by acute food insecurity, according to WFP. So far, the program has nonetheless been able to procure a third of its food from small-scale farmers in the region. 

China, Turkey and European countries benefit the most

However, it's not the poor countries and hunger-stricken regions that have benefited the most from the 33 million tons of grain delivered from the Black Sea region as part of the former grain deal.

Only 1% of it went directly to Ethiopia, Kenya and Somalia in the Horn of Africa, said Kariuki. This means that out of around 1,000 ships carrying 33 million tons of grain, only 13 ships with 313,000 tons arrived in East Africa.

The main recipients of Ukrainian grain were China, Spain, Turkey and Italy. However, these exports lowered the global market price and indirectly benefited poorer countries as well.

Nevertheless, Tiedeman noted that in the grain futures market "nervousness and volatility is still relatively high." He said he hoped, however, that "the fluctuations might not be as significant this year" because consumers, importing nations and traders had not been taken completely by surprise by the situation.  

Vladimir Putin's promise premature?

After the grain deal expired, Russian President Vladimir Putin made the lofty promise of free deliveries of Russian grain to African countries to prevent a hunger crisis. Yet, due to Ukrainian drone attacks on Russian Black Sea ports like Novorossiysk, Russian grain exports are far from secure.

Ukrainian President Volodymyr Zelenskyy has increased pressure on Moscow and announced further attacks on Russian ships and ports as long as Russia continues to target Ukrainian grain ports with rockets and drones.

International cargo ships are already avoiding Russian ports in the Black Sea. Last year, Russia exported more than 100 million tons of wheat from there. This year, just around 88 million tons are expected.

Russia's export problems are compounded by the way insurance companies are demanding higher premiums for ships calling at Russian Black Sea ports, as reported by anonymous insiders to Reuters.

In addition, shipping companies are imposing surcharges of up to $10,000 (€9,065) per day, compared with similar Black Sea ports in Romania and Bulgaria, according to another insider cited by Reuters.

Industry experts told the same news agency that Russia is trying to dodge higher shipment costs with a "shadow fleet" of mostly older ships operated by Turkish or Chinese owners. 

The threat of future escalation 

Following Russian attacks on grain storage facilities in the Ukrainian port of Odesa, Ukrainian exports are now being redirected through ports along the Danube River, including Reni and Izmail. But they are within reach of Russian rockets and drones.

In early August, the port of Izmail — located directly on the border with Romania — was targeted. Any further escalation of the war has the potential to push up world grain prices again.

"In the region, the Danube marks the borderline. The Russians are playing a very, very risky game there," said Tiedemann, referring to the possibility that Russian drones or rockets could hit the territory of NATO member Romania.

Meanwhile, Ukrainian attacks on Russian Black Sea ports are also causing jitters within grain markets. After all, a quarter of the world's wheat exports are shipped through them, Tiedemann said.

At the moment, prices remain stable on the assurance that there is enough grain available this year, following record harvests in Australia and Russia last year.

However, that assurance could dissolve into nothing if the war escalates in the Black Sea region.

Or, in the best case, that might force Russia and Ukraine to revive the grain deal.

This article was originally published in German.