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

Good morning. President Vladimir Putin’s decision to pull the plug on the wartime deal that unblocked the passage of millions of tonnes of grain via southern Ukraine will lead to a fresh jump in price, experts warned, with “catastrophic consequences” for poorer nations already facing acute food shortages.

The US called Moscow’s suspension on Saturday of its participation in the UN-backed deal with Kyiv an “outrageous” action that risked fuelling starvation. 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 doubtful that the deal would have endured beyond its mid-November deadline, had not expected a sudden termination.

“We’ll see a substantial spike in prices” 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 new disruption to supply from Ukraine, a leading global exporter of grain and other food products. “In the good times [this] would be bad, but in the current state of the world, it’s something that needs to be resolved as soon as possible,” he said.

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2. More than 150 dead in crush at Seoul Halloween celebration South Korea president Yoon Suk Yeol has declared a period of national mourning after at least 151 people died and scores more were injured after a crowd surge caused a panic on Saturday night in the narrow streets of Itaewon, a popular nightlife district. Yoon has vowed to conduct an investigation into the cause.

3. Brazilians vote after long and bitter presidential battle In a defining moment for the political course of the country, a tight result is expected from yesterday’s run-off vote to decide between two polarising politicians: rightwing populist Jair Bolsonaro, the current president, and leftist former leader Luiz Inácio Lula da Silva.

4. Germany rejects push for fresh EU borrowing to battle energy crisis Christian Lindner, Germany’s finance minister, has rejected common borrowing by the EU as a way to address the bloc’s energy crisis, saying it was cheaper for individual states to raise debt by themselves given the higher interest rates faced by the European Commission.

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The day ahead

Space launch China’s National Space Administration will launch the last of three modules today that comprise the Tiangong Space Station.

Military drills Starting today, South Korea and the US will conduct military drills for the next five days.

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

European Daylight Saving Time ended last night. Clocks in the UK turn back one hour, returning to Greenwich Mean Time (GMT) today.

What else we’re reading

How Russia secretly takes grain from occupied Ukraine An investigation by the Financial Times into the illicit grain trade out of occupied Ukraine reveals a complex shadow operation managed by private companies and arms of the Russian state itself. Russia’s invasion of Ukraine, one of the world’s biggest grain exporters, has caused global food shortages and sent prices for grain soaring.

‘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 has been among the most colourful and chaotic dramas in corporate history. The acquisition, which ended hastily before the October 28 deadline, drew in a cast of Wall Street powerhouses, Silicon Valley elite, and a few ‘meme-splainers’.

Xi blindsides investors with no ‘adults in the room’ When China’s president Xi Jinping moved to tighten his grip on power earlier this month, analysts expected him to include at least a couple of moderates in his leadership team. The absence of even one such figure, combined with the late release of disappointing economic data, sparked record selling of Chinese stocks by foreign investors.

Benjamin Netanyahu plots return to power as Israel heads for polls With tomorrow’s election on a knife edge, the former prime minister’s chances are likely to depend on the far right. This will be Israel’s fifth election in three and a half years of political gridlock and is widely seen as a referendum on Netanyahu, a polarising figure who has been Israel’s leader for 15 of the past 26 years.

European consumers cut back on discretionary spending In the latest evidence of the mounting strain on the region’s economy, European consumers have begun cutting costs as rising energy bills and interest rates push up the cost of living. Consumer sentiment has dropped sharply and car sales, box office revenues and hotel bookings are all falling.

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