Collapse of grain deal not thought to impact Cyprus 

Officials and farmers said on Tuesday they do not anticipate either a spike in grain prices or immediate shortages after the lapse of the Black Sea grain deal last month.

In mid-July Russia decided not to extend a 2022 agreement that had allowed Ukraine to export its grain by sea despite a wartime blockade, a deal seen as essential to keeping global food prices stable.

Asked about the possible fallout, agriculture ministry official Constantis Spanashis told the Cyprus News Agency that the island imports more than 85 per cent of barley for animal feed. Meanwhile Cyprus is entirely reliant on imports of corn, soybeans and other derivatives.

Regarding grains for human consumption, Spanashis noted that “things are a little better, as up to 30 per cent [of demand] can be covered by local production, especially durum wheat.”

On whether Cyprus has been affected by Russia’s withdrawal from the Black Sea grain deal, the official commented that the development caused some “market disruption.”

He added: “We will not have a significant disruption here, beyond the small price increase recorded.”

The official said he did not expect further price hikes, due to the fact that alternative export routes to the European continent have kicked in.

“There are also some ports in Ukraine which continue to export. Unless something else happens, like last week when attacks occurred on grain silos, I’m hopeful that we won’t have the turbulence we saw with the start of the [Russian] invasion.”

According to Spanashis, grain prices jumped by 5 to 10 per cent soon after Russia walked out of the Black Sea agreement.

That said, he pointed out that no new grain shipments have arrived in Cyprus since then. The first shipments after the lapse of the deal will be arriving soon.

“I think that for the time being we have no indication that would cause us to panic, no indication of shortages. We also have some reserves, purchased last year as soon as the crisis broke out. The state ensured that we had some reserves lasting up to a month. But personally, I don’t believe we’ll need to tap into those reserves.”

For his part, head of the wheat producers association Kyriacos Kailas said the Black Sea deal had benefited both livestock farming and the economy in general.

But, he added, local grain producers took a financial hit because they had sowed at a higher cost and harvested when prices had gone down.

He, likewise, did not expect new price increases in products like milk, eggs, meat, flour and bread.

According to Kailas, the prices of these products had doubled in the wake of Russia’s invasion of Ukraine in early 2022. Nevertheless, no corresponding drop in prices for these consumer goods occurred following the subsequent Black Sea grain agreement which brought the price of grain down.

“I had not seen [price] decreases during the time when grains went from €400 to €200 a tonne… I saw no drop in the prices of consumer goods, so now we should not be seeing any price hikes either.”

Regarding the availability of grain products following Russia’s walkout from the Black Sea deal, Kailas spoke of large quantities of grains having found their way to European countries like Bulgaria and Romania.

But, he qualified, a price mark-up should be expected for these cargos.

“Due to the closing of the Black Sea, grain dealers – three or four big companies worldwide- stand to benefit. There have been price increases of about €100 per tonne since the day the deal was scuttled.”

The farmer said there appears to be no short-term problem with supply of grains for animal feed.

As for grain for human consumption, the government had secured reserves for three months.

“Because of the price increase, the reserves have depleted considerably, and the government should look into this. It may be early, but officials should pay attention.”

General secretary of the Union of Cypriot Farmers (EKA) Panicos Hambas was far less sanguine.

He said that if the war in Ukraine drags on, and Cyprus suffers another drought, the government should make plans to import hay to ensure that animals keep producing enough milk for halloumi cheese.

“Cyprus is affected by climate change. This year we had a drought. The predictions are that if next year we don’t get enough rainfall, Cyprus will have to import many tonnes of animal feed and hay, so that we can maintain the production of milk needed to make halloumi.”