Russia Might Exit From Black Sea Grain Deal After May 18 – OpEd
The Russian Foreign Ministry said on April 13 that Russia sees no possibility of extending the deal for the export of grain from Ukraine’s southern ports after May 18, unless “five systemic problems” are resolved. According to the ministry, the agreement, which was extended for 60 days on March 14, only facilitates Ukraine’s commercial exports in the interests of Western countries.
The five demands that the Russian Foreign Ministry enumerated include the need to reconnect Rosselkhozbank (the Russian Agricultural Bank) to the SWIFT payment system; resume supplies of agricultural equipment to Russia; lift restrictions on the insurance and re-insurance of Russian grain vessels and lift the ban on their access to ports; resume the operation of the Togliatti-Odessa ammonia pipeline; and unblock the foreign assets and accounts of Russian companies engaged in the production and transportation of food and fertilizers.
The Foreign Ministry further noted that the UN Secretariat on the Black Sea Initiative on exporting Ukrainian food products which “once again distorts data and facts.” The UN statement for the media was triggered by the failure to carry out inspections within the framework of the Joint Coordination Center (JCC) in Istanbul for the first time ever since the grain deal was launched.
“It must be noted that neither Kiev’s continued blocking of ammonia supplies, also prescribed in the agreements, nor the lack of any progress in the implementation of the Russia-UN Memorandum has ever caused the UN Secretariat to make a public response,” the Russian diplomatic agency pointed out.
The Ministry noted that currently 28 vessels with over 1 mln tons of food products within the framework of the grain deal are awaiting inspections in Turkey’s territorial waters. “However, the UN staff at the JCC, which is responsible for the inspection plan, has refused to draw up such a schedule, trying to support the Ukrainians’ demands for the registration of ships engaged in the initiative,” it explained.
It also noted that “despite all the grandiloquent statements made about global food security and assistance to countries in need” the grain deal “has served Kiev’s commercial exports exclusively in the interests of Western countries.” “The UN World Food Programme’s share of humanitarian deliveries (543,928 tonnes) looks ludicrous compared with the total volume of food exports (27.7 million tonnes). But Kiev is trying to use even these deliveries for political purposes, such as advertising its Grain from Ukraine pseudo-humanitarian campaign,” the statement emphasized.
“The removal of obstacles to Russian agricultural exports was supposed to take place as part of the Russia-UN Memorandum, which the UN did not even mention this time. Such silence is not only a clear indicator of the UN Secretariat’s attitude to the package [UN Secretary-General] Antonio Guterres proposed, but also of the absence of any practical results regarding the Memorandum,” the report concluded.
Senior Researcher at the Russian Academy of Sciences’ Institute of World Economy and International Relations Viktor Nadein-Rayevsky says that the US and the EU, which play key roles in the negotiations, would hardly agree to make compromises in accordance with Russia’s demands.
“Most of the Ukrainian grain has already been exported. Meanwhile, they are unwilling to even partially lift sanctions because the main goal is to continue putting pressure on the Russian economy amid the Ukrainian crisis,” the expert said. “Moscow is trying to find alternative mechanisms for Russian exporters to reach global markets through Turkey and Qatar, including a resolution for the issue of vessel insurance,” he added.
Last year’s overheating in the grain market is over and, so the grain deals and the prospects for their termination are no longer having an impact on prices as they previously did, says Russian Grain Union President Arkady Zlochevsky.
According to him, the markets are unlikely to react strongly if the deal is not extended beyond May 18. Zlochevsky notes that even reconnecting Rosselkhozbank to SWIFT would not help Russian exporters fully resolve payment problems involving correspondent accounts at Western banks, which is where the main issue lies.
“The deal could have some positive impact if it influenced cargo insurance, freight and the entire payment process because these are the three major problems,” the expert explained.
Addressing both Russian and African parliamentarians during their conference “Russia – Africa in a Multipolar World” in March, Russian President Vladimir Putin spoke about food security, export of Russian grains, operated under the Black Sea Grain deal, to a number of African countries. That conference held March 20 brought together representatives of most countries on the continent, these legislators work with the mandates and in the interests of their people across Africa.
“I would like to stress that Russia is reliably fulfilling all its obligations pertaining to the supply of food, fertilisers, fuel and other products that are critically important to the countries of Africa. But unfortunately, there are obstacles here as well,” he stressed at the gathering held in Moscow under the auspices of the State Duma of the Russian Federal Assembly.
According to reports, Russia, guided by the needs of African countries, first and foremost, has recently agreed to extend the agreement concluded in Istanbul on the export of Ukrainian food through the Black Sea and the unblocking of Russian agricultural exports and fertiliser supplies for another 60 days.
At the same time, Russia has insisted on the package nature of this deal – above all, in the interests of African and other developing countries, considering the fact that they needed large amounts of food. It is African countries that are in need, and not to satiated European markets and countries. Meanwhile, about 45 percent of the total volume of grain exported from Ukraine went to European countries, and only three percent went to Africa.
“Let me stress that only if our position is taken into account will the fair and comprehensive implementation of the Black Sea grain deal be ensured, and depending on this, we will decide on our further participation in it,” he explained.
By the way, despite all the restrictions and limitations on the export of Russian grain, almost 12 million tonnes were sent from Russia to Africa. Putin continued: “I would also like to add that if we decide not to extend this deal after 60 days, Russia will be ready to supply the same amount that was delivered under the deal, from Russia to the African countries in great need, at no expense. (Applause.)”
Western powers have imposed tough sanctions on Russia over its Feb. 24, 2022, due to ‘special military operation’ in the neighboring Ukraine. The UN-brokered Black Sea grain deal allows the safe wartime export of grain from several Ukrainian Black Sea ports to different parts of the world. Under the deal – agreed in July last year – also allows the parties to reach an agreement on operational priorities. The Black Sea initiative expires on May 18.
Kester,
With all de respect, I don’t think that you fully appreciate the grift and corruption that exists in the western world. There is no real sanctions against Russia. Western European countries have been buying copious amounts of both liquified natural gas from primarily the Chinese and Qataris at 3-4 times the price of pipeline gas and processed petroleum at higher prices that they are able to purchase directly from Russia. Russia’s economy is doing very well especially compared to Western European and even the US economy. Let me explain to you something that I assume that you are unaware of. Diesel fuel which is widely used for the supply chain especially for trucks, requires the processing of petroleum at processing centres that costs hundreds of millions of dollars and requires a specific type or blend or oil. Most if not all the processing centres for diesel use what is known as sour crude. There are only two countries who provide this specific type of sour crude. Russia, Urals crude and Venezuela. If a processing facility wants to move to a different crude or most likely a blend of various crudes, it would require tens of millions of dollars of modification to the processing facility and the lost of revenue concomitant with the time required to make that change. So given that choice, most if not all business owners choose to buy Venezuelan crude via Iran or Russian Ural crudes via Greek or Indian shippers or other third parties that get in on the game rather than change their facilities. Even though Russia is not selling energy products in the volumes that they were previous. The shortages on the market has increased the prices to the point where their financial and economic position has not been impacted. Inflation is lower than in those western countries backing NATO in proxying Ukraine to fight Russia on their behalf, their reserves (in gold) stand at more than $600 billion. The western countries, whose leaders are all mentally challenged (Von Der Leyen and Annalena Baerbock being typical examples) and only capable of regurgitating whatever narratives that they are told to spout without ever having a thought about the impact of what they say. Is it any surprise that although they thought that they had frozen $300 billion in Russian assets that because Russia and its officials and business executives actually understand how the financial and banking industry works, that the EU has only managed to find $30 billion of it. And in your article where you speak about the grain deal, as the saying goes, “All lies filter down to the truth”, we now all know the lie from the west of their desire to provide grain to countries in the global south. They were using it for themselves (Spain being one of the biggest consumers) and it is only because farmers in central and Eastern Europe were not able to sell their grain products at reasonable prices have we discovered that Ukrainian grain was being dumbed by the European on the European market. And worst because of the infiltration of US agricultural conglomerates like Monsanto into Ukraine after the Maidan coup in 2014, we know see that the quality of Ukrainian agricultural products are now as bad and infested with GMO, herbicides and insecticides as food in the US. No wonder farmers and consumers in those countries are rejecting it. We should all give thanks that Ukrainian grain never reached Africa!