Summary:

On 17 July 2023, Russia announced that a deal allowing the export of Ukrainian grain via the Black Sea had been “terminated” with the Kremlin further indicating that ships transiting the Black Sea would be treated as “carriers of military cargo.”

The deal termination came after a presumed Ukrainian attack on a strategic bridge connecting Crimea to mainland Russia. Shortly thereafter, Russia responded with cruise missile strikes and announced the end of the deal. Russian officials had previously complained that Russian was not benefiting from the deal.

Since its signing in mid-2022, the deal facilitated the export of over 30 million tons of Ukrainian wheat, allowing a critical source of global food supplies to continue flowing to countries in Europe and Africa. Prior to the Russian invasion of Ukraine, Tunisia consistently purchased more than half of its wheat and barley from Russia and Ukraine.

US Secretary of State Antony Blinken previously warned Russia against weaponizing global food supplies. A Council on Foreign Relations report included Tunisia in a list of countries that could experience significant negative impacts following the termination of the Black Sea deal. Tunisia has already struggled to maintain a consistent wheat supply chain, with the government searching for solutions as import costs rise and government funds dwindle. Furthermore, an ongoing drought has cut Tunisia’s domestic wheat production by 60%.

Outlook:  

The disruption of wheat exports from the Black Sea poses significant risk to economic and social stability in Tunisia. Further disruptions to the food supply chain risk pushing the already vulnerable economy and population into a crisis that could lead to unrest and more tangible pushback against the current government.

Bread made from imported wheat is a major source of daily nutrition for many Tunisians and has a history of causing significant unrest when threatened.

As the government’s budget dwindles and global prices continue to put pressure on Tunisia’s already limited purchasing power, additional supply chain disruptions are likely and could lead to protests or other forms of unrest, particularly among poor Tunisians.

Explore our services or speak with our team of North Africa-based risk experts.