Russia has withdrawn from a pact that saw more than 32 million tonnes of Ukrainian grain exported to 45 different countries in the past year.
Key points:
- Nearly half of the food exports from Ukraine went to developing nations
- A Kremlin spokesperson said Russia’s demands for alterations to a MOU had not been met
- Food exports from Ukraine’s river ports are far less than those from its Black Sea ports
The Black Sea Grain Initiative was brokered between Ukraine and Russia by the United Nations (UN) and Türkiye nearly 12 months ago to allow food to be exported from Ukrainian ports during the ongoing war.
Russia also has a separate memorandum of understanding (MOU) with the UN that facilitates exports of its fertiliser and grain, neither of which have been sanctioned.
Kremlin spokesman Dmitry Peskov said on Monday night that until Russia’s demands for alterations to its MOU had been met, they would no longer support the Black Sea Grain Initiative.
“The grain deal has halted,” he said.
“As soon as the Russian part of the deal is fulfilled, the Russian side will resume the fulfilment of this deal without delay.”
Türkiye president Tayyip Erdogan remained optimistic ahead of a meeting between his foreign ministers and Russia’s on Monday night.
“I hope that with this discussion, we can make some progress and continue on our way without a pause,” he said to reporters shortly after Russia’s announcement.
The last vessel approved under the deal sailed from the port of Odesa on Sunday, and the number of inspections and tonnes of grain exported had been declining for months.
Russia seeking changes
Russia’s opposition to participating in the initiative has been growing ever since the deal was signed.
It is seeking reconnection of the Russian Agricultural Bank, Rosselkhozbank, to the SWIFT banking payment system, and expansion of its ammonia exports.
Prior to Russia’s invasion, it would send an annual 2.5 million tonnes of ammonia through the 2,470 kilometre Togliatti-Odesa pipeline to be exported from the Ukrainian port of Pivdennyi.
The pipeline has been shut down since the invasion, and last month was damaged by an explosion that led to intensified signals that Russia would pull out of the grain export deal when it expired.
Feeding the world
The Black Grain Initiative led to 32.8 million tonnes of food getting shipped out of Ukraine over the past 12 months.
Half of those exports are corn, another quarter wheat, with sunflower meal, sunflower oil and other commodities making up the remaining quarter.
Nearly 50 per cent of the exports went to the Asia Pacific region, western Europe took 40 per cent, while 12.2 per cent were sold to Africa.
The World Food Program access to 725,000 tonnes of wheat had been delivered to people in need from Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen, by the World Food Program.
“The grain shipped is sufficient food to feed approximately 150 million people for one year,” University of Southern California Price School of Public Policy research professor Dr Adam Rose said.
“It has also helped significantly in lowering global food prices.”
The UN Food and Agriculture Organisation’s cereal price index sat at 147.3 this time last year, and has since slid to 126.6 in the last month, a decline of 14 per cent.
The overall food price index has dropped nearly 12 per cent, from 140.6 to 122.3 over the same time.
“The Black Sea deal has definitely helped decrease food insecurity in developing countries by maintaining the flow of key foodstuffs and helped to alleviate upward pressure on grain prices,” Dr Rose said.
A difficult process
To participate in the initiative, vessels register their interest with a Ukrainian port, which then notifies the Ukrainian Sea Ports Authority.
The applications, along with their planned arrival and departure dates, are then considered by the Joint Coordination Committee (JCC).
Incoming vessels are inspected by the JCC, where inspectors from the UN, Türkiye, Ukraine and Russia check its documents, ensure it is empty and carrying no unauthorised personnel.
The pace of these inspections has slowed to trickle over the life of the deal, according to Lloyds List data analyst Bridget Diakun.
“Vessels are trying to register; there are 29 applications from ships that would like to join,” she said.
“But an application has to be agreed by every single party, and the Russians reject them.”
In June, Ms Diakun was able to hold an off-the-record discussion with UN Black Sea Grain Initiative coordinator Abdullah Dashti.
“The main thing to emphasis from that conversation is that it is still a win, they are still exporting, because from the perspective of the countries receiving the grain, even a small amount is really valuable,” Ms Diakun told Country Breakfast.
“He emphasised the fact you’ve got two belligerents sitting at the table, and you’re trying to reach consensus every single day, and that is really difficult.”
New pathways
As the pace of exports from Black Sea ports has slowed, more grain has been leaving Ukraine’s river ports along the Danube.
The cluster of river ports, Reni, Izmail, Kiliia and Ust-Dunaisk, are located along the Romanian border, and have been important logistics hubs during the war.
“In the first five months of this year, they exported 12.3 million tonnes of cargo, and they’re expected to hit 20 million tonnes” Ms Diakun said.
“And for the whole of last year they exported 16.5 million.”
Access to these ports improved after Ukraine recaptured Snake Island.
While the Ukrainian government is pouring money into further upgrades of these ports, they will not make up the volumes that Black Sea ports are capable of exporting.
“These ships are much much smaller, because there are limitations with size, and the waters of the Danube move quite quickly,” Ms Diakin said.
“It is no replacement.
“It is important because it keeps things moving, but it doesn’t have the capacity, and nothing the Ukrainians can do right now is going to significantly change that.”