Putin did not renew a grain export agreement

The Russian government reported this Monday that it will not again extend the validity of the grain export agreement signed in 2022 with Turkey and the UN -and indirectly with Ukraine-, arguing that part of it is not fulfilled, to the detriment of the Russian economy. . “The Black Sea deal has de facto ended today,” Kremlin spokesman Dmitri Peskov said. Although he left a door open for negotiation: “As soon as the Russian party is satisfied, the country will immediately return to the grain agreement,” he added. The pact commits the two warring countries to mutually guarantee that their grain-exporting ships will not be targeted by military attacks.

Ukrainian cargoes cross the Black Sea from the port of Odessa — not far from the front lines — without being attacked by Russian troops and cross into Europe through the Bosphorus Strait in Turkey, where a Joint Coordination Center monitors that no weapons are transported.

Muscovite claims

Moscow has been complaining for months that its interests are not respected under the pact, which included lifting barriers to exporting agricultural products and fertilizers. Russia has continued to export both products, but in a reduced way due to the financial obstacles implied by Western sanctions. While Ukraine comfortably exports everything it wants: a large part of these grains are bought by international NGOs that fight hunger in Africa.

The original agreement was achieved thanks to the mediation of Turkey and the UN to avoid a world food crisis: Ukraine and Russia are two of the world’s largest grain producers and the Russians are also the largest producer of fertilizers (former President Jair Bolsonaro avoided confronting Putin because Brazil needs these products for planting).

the price of grains

When Russia invaded the Ukraine in February 2022, the price of grains on the Chicago Stock Exchange rose to all-time highs, throwing millions of people into misery, especially in Africa and the Middle East. Prices could be lowered after the agreement that would mean that ships leaving Ukraine would not be attacked by Russia, while Russia would be allowed to continue exporting food and fertilizer (These products were left out of the economic sanctions).

When the agreement entered into force, world grain prices fell 23 percent and Ukraine has so far exported 32 million tons. Putin’s main complaint is that the financial sanctions at a general level greatly reduced his country’s exports, and therefore the pact would not be being fulfilled: since Russia has been expelled from the SWIFT interbank payment system worldwide, it is very complex and expensive to pay for logistics and insurance issues, and receive payments in foreign hard currency. Russia’s main claim is to reconnect the SWIFT system to the Russian Bank of Agriculture.

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world reactions

Germany and the United Kingdom criticized Moscow and the president of the European Commission, Ursula von der Leyen, called the decision “cynical”. The UN Secretary General, Antonio Guterres warned that millions of people are going to “pay the price” for this Russian decision that “will affect the poorest people around the world.” “Hundreds of millions of people face hunger and consumers will face a global cost of living crisis”Guterres said. “We are already seeing that the price of wheat has risen this morning,” he warned.

The UN chief sent a letter to Vladimir Putin with new proposals to keep the initiative alive, in which he reminded the president that it has also helped Russian grain exports to reach “high export volumes and fertilizer markets to are stabilizing.” In the letter he also reminds the Russian president to establish a payment mechanism “tailored for the Russian Agricultural Bank through JP Morgan outside of SWIFT” to circumvent international sanctions. The Russian decision “will not stop my efforts so that both Ukrainian and Russian food products and fertilizers reach international markets,” Guterres said..

Zelensky’s gaze

Ukrainian President Volodymyr Zelensky stressed the need to do everything necessary to keep the grain corridor operational, even without Russia’s involvement. And he said that the Ukrainian side has not violated any agreement. “Even without Russia, it is necessary to do everything possible to ensure that we can use this corridor. We are not afraid. Shipping companies have contacted us. They have told us that if Ukraine lets out and Turkey lets through, they are all ready to continue supplying grain,” he declared. During an interview, Zelensky recalled that there are two agreements: one between Ukraine, Turkey and the UN and another between Russia, Turkey and the UN. So when Russia says that she is ending the deal, she “is breaking her agreements with the UN Secretary General and with President Erdogan, not with us,” he noted.

the turkish mediator

The Russian decision was called an “act of cruelty” by the US ambassador to the UN, accusing Moscow of holding “humanity hostage.” “While Russia plays political games, real people will suffer.”

Russia had already reaffirmed this agreement three times since it entered into force, but it has been demanding its cancellation for months due to breaches. Every time it was about to annul its validity, the president of Turkey intervened as a mediator and that did not happen. Erdogan and Putin will probably meet in the next month and presumably the Turkish president will try to negotiate something with the Russian, whom he has already changed his mind several times.

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