FirstFT: Russia’s exit from Ukraine grain deal is ‘catastrophic’ for poor countries

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Hello. President Vladimir Putin’s decision to end the wartime deal that unblocked the passage of millions of tonnes of grain through southern Ukraine will cause prices to spike again, experts have warned, with “Catastrophic consequences” for the poorest countries already facing severe food shortages.

The United States called on Moscow suspended Saturday of its participation in the UN-backed agreement with Kyiv an “outrageous” action that risked fueling famine. Moscow linked its decision to a weekend attack on ships in the port of Sevastopol, part of the territory Russia annexed from Ukraine in 2014, which Ukraine called a “false pretext”.

The Kremlin’s announcement surprised grain traders and analysts who, while doubting the deal would have lasted beyond its mid-November deadline, did not expect a sudden termination.

“We will see a substantial price spike” as a result, said Andrey Sizov, managing director of Black Sea grain consultancy SovEcon, adding that Russia’s move was its “worst-case scenario”.

Arif Husain, chief economist at the UN World Food Programme, said “dozens of countries” would be affected by a further disruption in supplies from Ukraine, one of the world’s top exporters of grains and other food products. “In good times [this] would be bad, but in the current state of the world, it is something that needs to be resolved as soon as possible,” he said.

1. Workers flee China’s Covid restrictions at huge iPhone factory A coronavirus outbreak at the Foxconn factory in central China, the world’s largest iPhone factory, has sparked an exodus of hundreds of workers fleeing on foot to escape the “chaos” of being locked in dormitories to self-quarantine amid dwindling food and medical supplies.

2. More than 150 dead in crush during Halloween celebration in Seoul South Korean President Yoon Suk Yeol has declared a period of national mourning after at least 151 people died and dozens more were injured after a wave of crowds caused panic Saturday night in the narrow streets of Itaewon, a popular nightlife district. Yoon pledged to investigate the cause.

3. Brazilians vote after a long and bitter presidential battle At a decisive moment for the political course of the country, a tight result is expected from yesterday’s second round to decide between two polarizing politicians: right-wing populist Jair Bolsonaro, the current president, and former left-wing leader Luiz Inácio Lula da Silva.

4. Germany rejects pressure for new EU borrowing to tackle energy crisis Christian Lindner, Germany’s finance minister, rejected joint EU borrowing as a way to tackle the bloc’s energy crisis, saying it was cheaper for individual states to take on debt themselves given the higher interest rates the European Commission is facing.

5. Sunak reconsiders participation in UN climate summit Rishi Sunak, British Prime Minister, cited “pressing national commitments” in his initial decision not to attend the UN COP27 climate summit next month in Egypt. His choice was met with a chorus of criticsleading Sunak to open the door to a possible U-turn.

The day ahead

Space launch The China National Space Administration will launch the last of the three modules that make up the Tiangong Space Station today.

military exercises Starting today, South Korea and the United States will conduct military exercises for the next five days.

United States Supreme Court The highest court in the United States will hear from “anti-affirmative action activists” seeking to ban Howard University and the University of North Carolina from considering race in undergraduate admissions.

European summer time ended last night. Clocks in the UK are set back one hour, back to Greenwich Mean Time (GMT) today.

What else we read

How Russia Secretly Takes Grain From Occupied Ukraine Financial Times investigation into illicit grain trade from occupied Ukraine reveals a complex shadow operation run by private companies and Russian state arms himself. The Russian invasion of Ukraine, one of the world’s largest grain exporters, has caused global food shortages and pushed up grain prices.

‘Mischief and delay’: How Musk and Twitter finally sealed the deal The purchase of the influential social media platform by the world’s richest man was one of the most colorful and chaotic dramas in corporate history. The acquisition, which was completed hastily before the October 28 deadline, attracted a cast of Wall Street powerhouses, the Silicon Valley elite and some “meme reporters”.

Xi blinds investors without ‘adults in the room’ When Chinese President Xi Jinping moved to tighten his grip on power earlier this month, analysts expected him to include at least a few moderates in his leadership team. The absence of even one of these figures, combined with the late release of disappointing economic data, sparked a record sell-off in Chinese stocks by foreign investors.

Benjamin Netanyahu plots to return to power as Israel heads for elections With tomorrow’s elections on the razor’s edge, former prime minister’s chances likely hinge on far-right. It will be Israel’s fifth election in three-and-a-half years of political stalemate and is widely seen as a referendum on Netanyahu, a polarizing figure who has served as Israel’s leader for 15 of the past 26 years.

European consumers cut discretionary spending In the latest evidence of growing pressure on the region’s economy, European consumers have started cutting costs while rising energy bills and interest rates drive up the cost of living. Consumer confidence has fallen sharply, and car sales, box office receipts and hotel bookings are all down.

Line graph of the proportion of those who expect to make major purchases and those who don't (net balance) showing No time for big spending

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© Brittany Hosea-Small/AFP/Getty Images

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