Russia abandons Ukraine grain deal, UN confirms

UN sources have confirmed Russia’s withdrawal from the Black Sea Grain Deal with immediate effect, following a long-running dispute over the removal of sanctions affecting Russian fertiliser and food exports.

Over 1,000 shipments of corn, wheat, sunflower products and other soft commodities have left Ukrainian Black Sea ports since the launch of the initiative in July last year.

However, Russian negotiators have complained that a separate memorandum of understanding (MoU) signed the same month – which vowed to overcome barriers to the country’s exports of food, fertiliser and other raw materials – has still not been fully implemented.

Russian press secretary Dmitry Peskov told reporters early on July 17 the country had informed Turkey, Ukraine and the UN of its objections to extending the grain deal, on the grounds that “the Russian part of these Black Sea agreements has not been implemented so far”.

A UN source has confirmed to GTR that the Joint Coordination Centre in Istanbul received notification from Russia that it is withdrawing from the initiative with immediate effect.

In March, Russia threatened to withdraw from the grain deal unless there was “tangible progress on normalisation of our agricultural exports”, citing sanctions-related issues that were affecting bank payments and insurance cover.

Ministers singled out ammonia exports via the Tolyatti-Odessa pipeline as an area of concern.

Though the deal was eventually extended, tensions remained.

UN spokesperson Stéphane Dujarric said last week that the secretary-general had written to Russian President Vladimir Putin outlining proposals for implementing last year’s MoU.

Dujarric said the main objective was “to remove hurdles affecting financial transactions through the Russian Agricultural Bank, a major concern expressed by the Russian Federation, and simultaneously allow for the continued flow of Ukrainian grain through the Black Sea”.

Further statements from the UN and the Russian Ministry of Foreign Affairs are expected today.

Martin Devenish, board director and head of corporate intelligence at S-RM, says the end of the deal “is no real surprise”.

“Russia has been threatening to walk away for months, with Putin stating on Russian television as recently as last Thursday that ‘enough is enough’,” he says.

“Questions will be asked about how much of this Russian posturing was simply brinksmanship and whether the UN could have offered any further concessions on fertiliser and food exports to bring Moscow back to the table.”

UN data shows that nearly 33 million tonnes of cargo had been shipped from Ukraine under the initiative, with China, Spain and Turkey the three largest importers of goods. In addition, 24 of the 1,004 shipments were backed by the UN’s World Food Programme.

Source: GT Review

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