“A matter of life and death” – that is what the failed grain deal means for the world Azerbaijan: Russia does not abide by the ceasefire

Russia has blocked the agreement to export grain from Ukraine across the Black Sea. Only when all requirements for the export of Russian grain are met will Moscow again honor the agreement.

As a result, the transport of millions of tons of Ukrainian grain, mainly maize and wheat, by sea has come to a standstill, although exports are mainly important for poorer countries.

With the Russian offensive war against Ukraine, famine and rising grain prices threatened in many parts of the world. The fact that this could be averted in the long term is thanks to an agreement between Moscow and Kiev that came about through the mediation of the United Nations and Turkey: the so-called “Black Sea Grain Initiative”.

Ukraine has been able to export 33 million tons of grain since August 2022, despite Russia’s war of aggression. But that could now change: Russia has announced that it will stop and not renew the agreement before midnight on Monday.

These are the far-reaching consequences:

What did the agreement regulate?

The July 22, 2022 agreement was designed to ensure safe passage through the Bosphorus for ships loaded with grain from three Black Sea ports in Ukraine despite the Russian war of aggression. The ships traveled through a corridor 310 nautical miles long and three nautical miles wide. A coordination center in Istanbul was staffed with the partners of the agreement to monitor the journeys: with representatives of the war opponents, as well as Turkey and the UN. Inspections must ensure that ships have not loaded weapons.

The first ship set sail in early August 2022. Due to the war, the export of agricultural products had been blocked for months. On Sunday, one of the last ships may have left the port of Odessa, the freighter “TQ Samsun”. According to the UN, it is loaded with more than 15,000 tons of rapeseed.

Why is the agreement so important for Ukraine?

Russia and Ukraine are both major grain exporters, earning billions from exports. For Ukraine, further impoverished by the war, important income for the state budget would be lost without exports. But the livelihoods of the country’s farmers are also at stake.

Ukraine also wants to continue playing its role as a guarantor of global food security. It is considered the “breadbasket of the world”. They also deliver some of the grain by rail. However, this means that not nearly as many quantities can be transported as by ship. Given the war, the railway lines are also necessary for the army, for example.

What does the grain initiative mean for poorer countries?

The German ambassador to the UN Human Rights Council, Katharina Stasch, calls grain exports “a matter of life and death”. Because many countries in Africa depend on supplies from Ukraine. According to the United Nations, 60 million people in seven countries in the Horn of Africa don’t always know where their next meal will come from after years of drought.

“If the grain initiative is not extended, East Africa would definitely be hit hard,” said Dominique Ferretti of the World Food Program (WFP) Emergency Relief Office at the end of June. With Moscow’s announcement that it would temporarily halt the grain deal, this could now become a reality.

Have the poorest countries really benefited?

While China was the main recipient of the exports the initiative enabled, the poorest countries have also benefited, the United Nations Conference on Trade and Development (UNCTAD) calculated. The poorest countries’ share of Ukraine’s wheat supplies was higher than before the war, Unctad economist Carlos Razo told the German news agency. This year it was 24 percent of Ukraine’s total wheat exports, while it was around 22 percent in the same period of 2021 and 17 percent the year before.

According to him, since the start of the grain initiative, a total of 1.9 million tons of wheat and 26,000 tons of sunflower oil have been delivered to the poorest countries. However, instead of 15 countries as before the war, only nine countries were supplied. For example, there were no more exports to Mauritania, Mozambique and Myanmar. “No wheat needed to fight hunger in the poorest countries has gone to China,” Razo said.

What are the consequences for the rest of the world?

With the initiative stopped, grain prices could now also rise again in the rest of the world, fears the chief economist of the UN agricultural organization FAO, Máximo Torero Cullen. The export of millions of tons of grain has led to a fall in world food prices – which, according to the UN, are 23 percent below the record highs of March 2022 in early July.

Why is Russia blocking an extension of the agreement?

From the outset, Russia has insisted that Western sanctions, which Moscow says hinder its own exports of grain and fertilizer, be eased in exchange for its cooperation.

Russian conditions include the unimpeded supply of ammonia to Europe via Ukraine, as well as the connection of the Russian Agricultural Bank to the SWIFT system, from which it was disconnected due to the sanctions.

Moscow sees the UN as having a duty to put pressure on the West – and has repeatedly threatened to pull out of the agreement.

Why does a solution fail?

The EU has recently proposed setting up a subsidiary of the agricultural bank to handle financial transactions. A spokeswoman for the Russian Foreign Ministry then accused the EU of a “deliberately unworkable plan”. The establishment of such a bank and the connection to the international banking communication network Swift takes months. However, lifting the sanctions against the agricultural bank demanded by Russia would require the approval of EU states, which is also considered unenforceable.

Russian banks are finding it difficult to carry out financial transactions due to the disconnection of the Swift communication network from the banks. Insuring ships and cargo is also experienced as difficult. “Under these circumstances, it is clear that there is no basis for continuing the Black Sea Initiative, which expires on July 17,” Zakharova said.

President Vladimir Putin said on state television on Thursday that next steps are still being considered. For example, there is the possibility of suspending Russia’s participation in the accord until the promises made to Moscow under the accord are actually fulfilled – a consideration that the Kremlin chief has now carried out.