Putin says Russia may exit Black Sea deal while G7 working on scheme to track suspected stolen Ukrainian grain
Russian President Vladimir Putin has said the country was considering withdrawing from the Black Sea Grain Initiative (BSGI) as it had failed to deliver any of its promises to export the Russia’s agricultural commodities and fertiliser to global markets, World Grain reported.
Due to expire on 17 July, the BSGI – brokered by the United Nations (UN) and Turkey – opened three Ukrainian ports following Russia’s invasion last February and subsequent blockade that had unsettled global grain markets and sparked fears of food shortages in less-developed nations dependent on Black Sea grain, the 14 June report said.
The deal has been renewed three times, most recently on 17 May for 60 days.
Meanwhile, the Group of Seven (G7) nations, which represents the world’s most economically advanced democracies, was tackling suspected theft of Ukrainian grain with a plan to use chemical identification of grain origin, said Mark Spencer, UK Minister of State for Food, Farming and Fisheries, as saying.
Spencer told an International Grains Council (IGC) conference in London that Britain was leading on the scheme, and that G7 countries were also working closely with Ukraine, the world’s fourth-largest grains exporter, the 12 June report said.
“We believe (chemical identification) will be an effective means for deterring further theft of Ukraine’s grain,” Spencer was quoted as saying.
Britain announced new sanctions last month on Russia over its war against Ukraine, targeting individuals and entities connected to the suspected theft of Ukrainian grain.
Targeting entities involved in grain trading was unusual as such activity typically came under humanitarian exemptions from sanctions.
Russia and Ukraine are two of the world’s top agricultural producers, and major players in the wheat, barley, maize, rapeseed, rapeseed oil, sunflowerseed and sunflower oil markets. Russia is also a leader in the fertiliser sector.
Since its introduction, the BSGI had been credited with delivering more than 30M tonnes of agricultural products and food through the Black Sea.
As part of negotiations to approve the BSGI, a three-year deal was set up under which UN officials agreed to help Russia with its food and fertiliser exports. However, Putin said this part of the agreement had not been implemented, the report said.
Although sanctions imposed on Russia by Western nations and their allies following the invasion did not target Russia’s food and fertiliser exports, they did place restrictions on payments, logistics and insurance that posed significant barriers to shipments, according to Moscow.
“We are thinking about getting out of this grain deal now,” Putin said at a meeting of Russian war correspondents and military bloggers.
“Unfortunately, … nothing was done in terms of liberalising the supply of our grain to foreign markets. There were a lot of conditions that Westerners had to fulfil under the leadership of the UN.”
UN Secretary-General António Guterres said on 12 June he was concerned Russia would quit the grain deal on 17 July.
“… We are working hard … to make sure it will be possible to maintain the Black Sea initiative and, at the same time, that we are able to go on in our work to facilitate Russian exports,” Guterres was quoted as saying.
Russia’s specific demands were that the Russian Agricultural Bank (Rosselkhozbank) should be reconnected to the SWIFT payment system, supplies of agricultural machinery and parts to Russia needed to be resumed, and restrictions on insurance and reinsurance needed to be lifted.
Other demands included the resumption of the Togliatti-Odesa ammonia pipeline that allows Russia to pump the chemical to Ukraine’s main Black Sea port, and the unblocking of assets and accounts of Russian companies involved in food and fertiliser exports, the report said.
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