After Russia’s exit, the grain agreement expired

Status: 07/18/2023 00:27

The Russian no to the extension had caused international outrage – now the grain agreement has expired. Ukraine announced that deliveries across the Black Sea would continue – even without security guarantees.

It was extended twice, and now Russia is saying no to continuing the grain deal. Almost a year ago, the agreement was negotiated in Istanbul with the mediation of the UN. It ensured that agricultural goods could be safely shipped across the Black Sea, thus ensuring the world’s grain supply.

In the morning, the Kremlin rejected a further extension of the deal. However, Ukraine wants to continue to deliver even without security guarantees. “We are not afraid,” said President Zelenskyy.

Ship owners are ready to call at Ukrainian ports for grain deliveries. The agreement between Ukraine, Turkey and the United Nations is still in force without Moscow. Only the separate agreement between Russia, Turkey and the UN was terminated. Zelensky did not say how the ships and their goods should be insured in the war zone.

Erdogan announces talks with Putin

Despite statements by the Kremlin, Turkish President Tayyip Erdogan expressed optimism about an extension. “I believe that my friend Putin wants to continue the agreement despite today’s statement,” Erdogan said.

An extension of the agreement could be possible before the Russian President’s visit to Turkey, which is planned for August, he said. Negotiations in this regard are already underway. For example, his foreign minister wanted to speak to his Russian colleague on Monday.

Russia sees promises not fulfilled

In the morning, the Kremlin declared the grain agreement “de facto” over. The parts of the agreement affecting Russia have not been fulfilled, said Russian government spokesman Dmitry Peskov in Moscow. But it will be reinstated as soon as the Russian conditions are met. At its core, it is about Western sanctions that, from a Russian perspective, prevent payments for Russian agricultural exports from being processed. Moscow had been threatening to let the agreement expire for several weeks.

Thousands of tons of grain from Ukraine

So far, more than 32 million tons of agricultural goods have been exported from Ukraine to 45 countries as part of the initiative, according to the UN. More than 1,000 ships have left Ukrainian ports. The amount of agricultural goods exported has declined in recent months. Ukraine accused Russia of delaying the agreed inspections.

The Food and Agriculture Organization (FAO) emphasized that the initiative lowers world market prices for food and contributes to the fight against hunger. With the help of the agreement, the UN World Food Program WFP was also able to bring 725,000 tons of wheat to crisis countries such as Afghanistan or Somalia. The initiative also had a political dimension: it was considered the only long-term agreement between the warring parties Russia and Ukraine.

Demands for the continuation of the agreement

Federal Foreign Minister Annalena Baerbock called for the grain agreement to be reinstated immediately. Addressing Russian President Vladimir Putin, during a visit to New York “in the interests of peace in the world” she called for hunger not to be used as a weapon. The exit from the agreement makes it clear that Putin shows no regard for the weakest in the world. Baerbock advocated continuing to work on other delivery routes, regardless of the sea route, “straight through the European Union” so that “the grain comes into the world”.

Chancellor Olaf Scholz made a similar statement on the sidelines of an EU meeting in Brussels. The fact that Russia does not want to extend the grain deal is “bad news”. “And for a country that attacked its neighbor with such aggression, that’s bad news for the rest of the world,” Scholz continued.

UN chief: “Lifeline for global food security”

UN Secretary-General António Guterres was deeply disappointed. The agreement was a “lifeline for global food security and a beacon of hope in a troubled world,” Guterres told journalists in New York. “One has a choice to participate in such agreements. But suffering people everywhere and developing countries have no choice.”

Guterres had written a letter to Putin last week with proposals to save the agreement. “I am deeply disappointed that my suggestions went unheeded,” he said. Nevertheless, the United Nations would continue to work in this regard, Guterres said. “Our goal must remain to advance food security and global price stability.”

US Secretary of State Antony Blinken called Russia’s termination of the international grain agreement “unscrupulous”. This will make groceries harder to get and more expensive in places where they are badly needed, Blinken said in Washington. “This must not happen.” The market is already reacting. Russia must reverse the decision.

Bottlenecks expected in Arab countries, Africa and Asia

The effects of the failed deal are not yet foreseeable. However, rising prices and supply bottlenecks are feared.

The German Farmers’ Association sees no bottlenecks on the German and European market for the time being after the temporary stop of the agreement for Ukrainian grain exports via the Black Sea. Deputy Secretary General Udo Hemmerling told the dpa news agency: “Should there be a longer interruption to the Black Sea route for grain, oilseeds and fertilizers, there could be supply bottlenecks and price increases in global agricultural trade again.” This is primarily at the expense of importers of bread grain in Arab countries, Africa and Asia. “In Central Europe, on the other hand, no supply bottlenecks are to be expected, since the local harvest is available here.”

Agreement came about in July 2022

After the start of its war of aggression against Ukraine in February 2022, Russia blocked the neighboring country’s sea exports. In July 2022, Ukraine, Russia and Turkey agreed as parties in Istanbul on the Black Sea Grains Initiative. The UN acted as mediator. The agreement has been extended several times. A second agreement was reached in Istanbul between the United Nations and Russia.

In a “Memorandum of Understanding”, the UN agreed to support the unimpeded export of Russian food and fertilizers to world markets. Russia repeatedly complained about the lack of implementation of the memorandum. For example, the Putin government has demanded that Russia’s agricultural bank be reconnected to the SWIFT international payment system.

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