Russian President Vladimir Putin has announced his reluctance to resurrect a U.N.-endorsed agreement that previously alleviated global food prices by permitting Ukraine to transport its grain through the Black Sea, unless impediments to Russia’s agricultural exports are addressed.
Putin’s remarks followed a lengthy three-hour meeting with Turkish President Recep Tayyip Erdogan in Sochi, Russia. Erdogan, who played a pivotal role in brokering the original Black Sea Grain Initiative in 2022, had aspired to leave the discussions with a fresh negotiation framework to present to world leaders at the Group of 20 Summit in India later that week.
Instead, the two leaders have confirmed their intentions to ship 1 million tons of Russian grain via Turkey to African nations, concerned that disruptions could lead to higher food prices.
This volume represents only a fraction of Russia’s total wheat exports, expected to reach approximately 48 million tons this season. It pales in comparison to the quantity Ukraine was shipping through the Black Sea before Russia terminated the grain deal and closed the safe corridor in July.
The uncertainty surrounding the future of supplies from one of the world’s largest grain exporters has contributed to weeks of instability in global wheat prices, exacerbated by the escalating hostilities in and around the Black Sea.
In the lead-up to the talks, Russia initiated a series of drone attacks on the southern Odesa region, causing damage to storage facilities, industrial installations, and agricultural equipment. Additionally, it targeted two river ports, which are the primary alternative export routes to the Black Sea, setting a contentious tone for the negotiations.
Putin expressed his grievances about an increase in Ukrainian drone strikes on Russian gas pipelines, with his defense minister later citing these attacks as a reason for exiting the deal, according to the Interfax news service.
Turkey, a mid-sized power that has maintained robust relations with both Putin and Western nations, had successfully brokered the original deal, enabling Ukrainian shipments to re-enter the global markets disrupted by Russia’s invasion. Nevertheless, the arrangement, a rare diplomatic achievement in the midst of ongoing conflict, was inherently fragile. Ukraine’s grain exports were consistently hampered by slow ship inspections and political tensions. Russia had complained for months about its unmet demands for better trade terms before ultimately withdrawing from the agreement.
Ukrainian President Volodymyr Zelenskiy’s deputy chief of staff informed Bloomberg TV before the talks that his country relied on Turkey’s support to reinstate the grain deal and was prepared to export to impoverished nations in Africa and Asia. Ihor Zhovkva stated, “The crops in Ukraine this year are quite good. So we are ready. The world is suffering when Russia is using aggressive instruments in the food security area.”
However, Putin adhered to the stance Russia had adopted upon its exit from the agreement. He stated during a news conference after the talks, “We will be ready to consider the possibility of reviving the grain deal. We will do it immediately as soon as all the agreements on the lifting of restrictions on the export of Russian agricultural products are fulfilled.”
Russia has demanded the removal of impediments to its food and fertilizer exports, some of which were imposed immediately after the invasion of Ukraine. Banks, insurers, and shipping companies refrained from dealing with Russian goods, and Baltic nations halted the handling of Russian volumes through their ports. Nevertheless, Russia has continued to export record amounts of wheat, with its fertilizer exports also rebounding to pre-war levels.
Russia is also eager to reopen an ammonia pipeline that passes through Ukraine and reconnect Rosselkhozbank, a state-owned agricultural lender, to the SWIFT system for international payments.
The United Nations has collaborated closely with private-sector banks and insurance providers in an attempt to address Russia’s concerns. U.N. Secretary-General Antonio Guterres recently delivered a revised proposal to Moscow, which he believes could serve as the foundation for a revamped deal. Guterres emphasized, “We cannot have a Black Sea Initiative that moves from crisis to crisis, from suspension to suspension. We need to have something that works and that works to the benefit of everybody.”
Without a new agreement, Ukrainian crops will still find their way to the market, but increased transportation costs could discourage future grain plantings, potentially impacting global supplies over the long term.
The 1 million-ton plan appears to be a separate effort to alleviate concerns in Africa, where Russia has been striving to expand its influence at the expense of Western powers. Erdogan stated that Turkey is prepared to receive Russian grain and process it into flour for export to the continent, with financial support from Qatar.
Ukraine’s foreign minister cautioned last week that any deal excluding Ukraine would only bolster Russia’s tactics.
Erdogan and Putin have maintained extensive communication since Russia’s invasion of Ukraine in 2022, collaborating on plans to expand gas imports and nuclear energy cooperation. The leaders confirmed that they discussed progress on both of these ambitious endeavors.
Source: with agencies