The Black Sea Grain Initiative, designed to bring Ukrainian grain to desperate global buyers, was one of the few positive international deals to ameliorate the impact of the Ukraine war on the global economy.
But Russia withdrew on Monday. While Russia’s accession to the deal allowed Ukraine to export millions of tons of grain, the Kremlin argues, the West never implemented promised measures that would have facilitated Russia’s exports of food and fertilizer.
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The Kremlin’s decision to withdraw from a deal to allow Ukrainian grain to reach the global market is not simply a matter of spite. While the deal helped Kyiv and grain buyers, it has not helped Russia, Moscow says.
Russia insists that it has been ready to increase its own grain exports. But it has been hampered by difficulties related to the insurance of the ships carrying its goods, the separation of the Russian Agricultural Bank from the SWIFT financial system and other sanctions-related issues. Despite promises to lift impediments to Russian food exports, nothing has been done, the Russians say.
Furthermore, Turkish President Recep Tayyip Erdoğan angered the Russians by handing over several interned Ukrainian POWs earlier this month. As a result, Erdoğan’s calls for more talks on the grain deal may now fall on deaf ears in Moscow.
“The deal has never caused us anything but damage,” says Arkady Zlochevsky, president of the Russian Grain Union, an industry group. “A one-sided deal is not profitable for us.”
At a glance, the Kremlin’s announcement on Monday of a decision to formally withdraw Russia from the deal to keep Ukraine’s grains and oilseeds flowing to a hungry world might seem like a direct response to the Ukrainian drone strike that damaged the Kerch Strait Bridge. , Crimea’s key link to the Russian mainland.
But this was probably a decision that had been a long time coming.
The Black Sea Grain Initiative brokered by Turkey and the United Nations, despite Russia’s naval blockade of Ukraine’s Black Sea ports, was one of the few positive international agreements that helped ameliorate the impact of the near war. 17 months in the global economy. , particularly the price of basic foods.
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The Kremlin’s decision to withdraw from a deal to allow Ukrainian grain to reach the world market is not simply a matter of spite. While the deal helped Kyiv and grain buyers, it has not helped Russia, Moscow says.
But while Russia’s accession to the complex deal allowed Ukraine to export millions of tons of grain to the world market, Russia argues, the West never implemented promised measures that would have facilitated Russia’s exports of food and fertilizer.
Furthermore, a worsening geopolitical environment may have contributed to Moscow’s decision to terminate the deal. The Ukrainian attack on the Kerch bridge likely increased Russian determination to assert greater naval control over the Black Sea region.
In addition, Turkish President Recep Tayyip Erdoğan, a central mediator of the grain deal, angered Russia by handing over several interned Ukrainian POWs, members of the notorious Azov regiment, during a visit to Turkey this month by Ukrainian President Volodymyr Zelenskyy. As a result, experts say, Erdoğan’s calls for more talks on the grain deal may now fall on deaf ears in Moscow.
“Russia didn’t need this deal at all,” says Arkady Zlochevsky, president of the Russian Grain Union, an industry group. “The agreement has never given us more than damage. … This agreement was terminated by Russia because obligations to Russia were not fulfilled. There were agreements to facilitate Russian exports of food and fertilizer, the import of spare parts for our agricultural machinery, the reconnection (the Russian Agricultural Bank, which is under the supervision of the government body) Rosselkhoznadzor to the SWIFT bank transfer system (to allow payments from Russia exports).
“A one-sided deal is not profitable for us.”
“Impossible to continue”
The deal was negotiated a year ago to allow Ukraine to open up secure sea lanes to its heavily mined and blockaded Black Sea ports to export its stored grains and oilseeds to traditional markets amid shortages and soaring prices. Mr. Erdoğan and the UN separately negotiated with Russia and Ukraine and agreed on joint measures to monitor and inspect shipping. Over the past year, Ukraine has exported about 33 million metric tons of food products, while world food prices have largely stabilized. Prices rose again after the Russian announcement.
The Russian Foreign Ministry warned on Telegram that, starting Tuesday, the “humanitarian corridor” created in the Black Sea to allow grain shipments and the corridor’s monitoring system will now be closed, leading to a situation “temporarily dangerous” in shipping lanes. In practice, that may mean imposing a full Russian naval blockade on Ukrainian ports.
“Maybe Russia will now move to shut down all shipping to Ukraine’s Black Sea ports, which includes much more than just grain,” says Alexei Mukhin, director of the independent Center for Political Information in Moscow. “Nothing that Russia wanted from the deal has materialized, and for the Kremlin, it has simply become impossible to continue it.”
The Western response to the Russian move has been harsh, with US Secretary of State Antony Blinken accusing Moscow of “food weaponry”. President Zelenskyy called for international measures to keep the flow of grain moving through the Black Sea without Russia’s involvement. In his usual daily address, Mr. Zelenskyy called on UN Secretary General António Guterres to work with “responsible states to restore food security and food supplies through the Black Sea routes”.
It is unclear who would enforce the open shipping lanes in the Black Sea if the Russian navy decided to close them. White House National Security Council spokesman John Kirby said the US military would not be used to protect Ukrainian grain shipments.
Feeding a global market
The propaganda war of words has focused primarily on the impact on vulnerable populations in the Global South. Russian President Vladimir Putin recently claimed that only 3% of Ukraine’s grain exports went to developing countries, with most going to rich countries. In fact, the largest single customer for Ukrainian grain delivered under the deal has been China, followed by Spain, Turkey and Italy.
But the importance to the international market of making Ukrainian grain available is not so much about who buys it, since the grain is fungible, but rather that it increases the overall available supply and therefore reduces overall demand. According to the UN, world prices fell by almost 25% after the implementation of the agreement, making grains more accessible to the poorest consumers.
Russia insists it has been ready to increase its own grain exports and provide them at a discount to countries facing famine. But it has been hampered by difficulties related to the insurance of the ships carrying its goods, the exclusion of the Russian Agricultural Bank from the SWIFT financial system and other sanctions-related problems. Despite promises to lift impediments to Russian food exports, nothing has been done, the Russians say.
Nor, they add, have the agreements to allow the export of Russian ammonia, a vital ingredient in fertilizers, been fulfilled. And in June, a pipeline carrying ammonia from Russia to the Ukrainian seaport of Odessa was destroyed, allegedly by Ukrainian saboteurs, leaving Moscow to say it had even less reason to renew the Black Sea deal.
A further extension of the deal could only be possible if Putin decides it is politically desirable.
“We might see a new round of talks between Erdogan and Putin, and they might come up with some new plan,” says Fyodor Lukyanov, editor of Russia in Global Affairs, a Moscow-based foreign policy magazine. “Since we (Russians) live in a system of large-scale personal autocracy, where everything depends on the will of a person, everything is possible. But it doesn’t seem likely.
No new talks between the Russian and Turkish leaders are currently on the agenda, the Russian news agency TASS reports.
When the grain deal was negotiated a year ago, many hoped it would lead to more diplomatic progress and perhaps even a path to peace. None of that has happened, while both Ukraine and Russia have looked for other ways to export their agricultural products. It seems unlikely that the end of the grain deal will make much of a difference, says Lukyanov.
“True diplomacy will start only when both sides realize that there is nothing more to be gained on the battlefield,” he says. “We’re not there yet.”