Concerns are mounting regarding the extension of the United Nations Black Sea Grain Initiative beyond the 18 November deadline, especially after Russia's recent - albeit temporary - withdrawal from the agreement. Through this initiative, Ukraine has been able to ship over 9 million tonnes of grains and oilseeds via its Black Sea ports. While the volume of exports remains below year-ago levels, importers benefitted from larger supplies, especially those who depend on Ukraine's agricultural products, while consumers worldwide have gained through lower market prices. Unfortunately, the pace of exports slowed in recent weeks as inspections could not keep up with the number of shipments; and now the possible termination of the deal threatens to re-ignite market prices and further exacerbate global food security concerns.

Since peaking earlier this year, international food prices have returned to levels last seen prior to the Ukraine war. However, prices of most foodstuffs remain high and continue to be under upward pressure from a range of factors, including low stock-to-use ratios for some commodities, high energy and fertilizer costs, poor weather in several key producing countries, and risks associated to the unresolved conflict in Ukraine. With a majority of countries experiencing food price increases between 10 and 30 percent over the previous year, domestic food price inflation is particularly worrisome, especially for the poor who spend a higher share of their disposable income on food.

The wheat harvest is underway in the northern hemisphere, with hot and dry conditions impeding winter wheat yields in several major producing regions, which further confirm an expected decline in global wheat production in 2022. While maize production prospects improved this month, global maize output is also forecast to fall below last year's level. Against this background, and with exports from Ukraine still largely constrained, international wheat and maize markets are expected to stay tight. This means prices will remain volatile and continue to be highly sensitive to daily news on crop development, weather conditions and policy changes. By contrast, global rice production prospects appear strong despite high input prices while soybean output could hit a new record.