Kremlin Ends Grain Export Agreement: Consequences for Russia and Ukraine

news 17-Jul-2023 Europe

Kremlin Halts Grain Agreement: Russia Ends Grain Export Agreement with Ukraine

Russia has announced that it will not extend the agreement for the export of grain from Ukraine through the Black Sea. The Presidential Office in Moscow made this announcement, and the current agreement expires today.

Russia has halted the agreement for the shipment of Ukrainian grain through the Black Sea. According to Kremlin spokesperson Dmitry Peskov, Moscow will resume fulfilling the agreement once all Russian demands for exporting its own grain are met, as reported by Russian media.

The agreement between Russia and Ukraine had been extended several times and officially remained in effect until late Monday evening. Peskov emphasized that Russia's position on the grain agreement was clear even before the recent attack on the Crimean Bridge. The attack did not influence Russia's decision.


Ukraine was able to export grain to a limited extent

On Thursday, Putin mentioned the possibility of suspending Russia's participation in the agreement until the commitments were fulfilled. In return, Moscow demanded easing sanctions on its fertilizer and food exports, including insurance, freight, and financing. Specifically, Russia requested that its state agricultural bank be exempted from Western sanctions to conduct business.


According to Deputy Government Spokesperson Christiane Hoffmann, Germany is still working to extend the agreement.


Controls in Turkish port

The agreement, mediated by the United Nations and Turkey in July 2022, aimed to alleviate the global food crisis by enabling the export of Ukrainian grain through the Black Sea, controlled by the Russian fleet.


Ships traveled through a sea corridor to Istanbul, where the cargo was inspected by mixed teams from Russia, Ukraine, Turkey, and the United Nations. The Russian leadership insisted on this to prevent arms smuggling.


In 2022, despite the war, Ukraine was able to export over 38 million tons of grain, generating revenues of over 8 billion euros. These earnings are crucial for the country's budget as it defends itself against the Russian aggression. However, compared to 2021, sea exports decreased by approximately 23 percent.


Grain exports are crucial, especially for poorer countries. Even exports not directly going to countries in the Global South contribute to lower prices in the global market.

According to ARD correspondent Ina Ruck, the suspension of the agreement brings more disadvantages than advantages for Russia. Putin can no longer present himself as a protector ensuring Ukrainian grain reaches the global market, particularly to poorer countries. Moreover, Russia risks alienating important partners like Turkey, which mediated the agreement, and China, a significant buyer of the exports.

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