Russian’s decision to suspend a crucial Grain Deal brokered by the U.N. and Turkey has raised concerns about rising food prices among lower-income Middle Eastern Countries like Egypt, Lebanon, and Pakistan. The deal had helped stabilize food prices after Russia invaded Ukraine, which is a major supplier of wheat, barley, and sunflower oil to developing nations. Egypt, the world’s largest wheat importer, worries about potential price hikes and the impact it could have on households, businesses, and government budgets already dealing with economic woes. However, the Egyptian government has stated that the impact of the grain deal’s end is minimal so far, as the country has diversified its sources of imported wheat and has enough stockpile to meet its needs for the next five months.

Lebanon, which relies on Ukraine for 90% of its wheat, also faces challenges with the collapse of the grain deal. With an already struggling economy and ongoing economic crisis, any negative impact on wheat prices could further worsen the situation. Additionally, Pakistan has seen a bumper crop despite unprecedented flooding last year, reducing its reliance on Ukrainian wheat imports.

While global wheat prices have remained relatively stable, the weakening currencies of these countries against the U.S. dollar and the need to source wheat from farther away could add costs and potentially lead to food price inflation. This puts pressure on governments to continue subsidizing bread prices and avoid exacerbating the cost-of-living crisis already faced by their populations. Overall, the suspension of the grain deal introduces uncertainty for these Middle Eastern countries and their efforts to address food security and economic challenges.

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