It’s that time again: This Monday, the grain agreement negotiated between Ukraine and Russia mediated by Turkey and the United Nations (UN) expires – and Moscow is again threatening not to extend the agreement any further. This time, the threat from the Kremlin appears to be more serious than in previous months – and that explains the willingness of the UN in particular to accommodate Putin’s attempts at blackmail. The last ship left the port of Odessa on Sunday morning, as an eyewitness reported to the Reuters news agency.
The agreement, signed in Istanbul at the end of July 2022, guarantees the safe export of fertilizers as well as corn, grain and other foodstuffs from ports in southern Ukraine across the Black Sea. The cargo ships are guided by Ukrainian pilots through a corridor 310 nautical miles long and three nautical miles wide past the mined areas. In Istanbul, before voyages to or from the Black Sea, the ships are inspected by representatives of all contracting parties to ensure that they are not transporting weapons. It is still not entirely clear why these checks, which sometimes involve very long waiting times, are also carried out when sailing out of the Black Sea.
Moscow repeatedly threatened termination in 2022 and then extended the agreement at the last second, usually by four months, most recently only by two months. Russia insists on the implementation of part of the agreement, which provides for the freest possible access to food and fertilizer from Russia to the world market. However, according to the Kremlin, this access is still restricted by the sanctions imposed by the West over the Russian attack on Ukraine. Indeed, the Russian wheat exports according to American estimateswhich also coincides with other sources, at a record high of at least 45 million tons last year.
The aim was to avert famine in the world
Ukraine’s exports, on the other hand, have fallen significantly – from almost 20 to around 15 million tons per year. Most recently, monthly exports via the Black Sea had fallen sharply again, from almost four million tons in March and still two million in June to just over 200,000 tons in July. The reason for this is a drop in inspections in Istanbul from an average of 11 a day in October 2022 to just 1.4 in July 2023. This is said to be due to delays by the Russian inspectors. However, Russia denies these allegations.
The aim of the agreement was actually not to save the export balances of the two countries at war, but above all to avert famine in other regions of the world. Russia and Ukraine produce large quantities of grain and cooking oil that are badly needed elsewhere. Especially in African countries, but also in some Asian and South American countries, the cost of food rose sharply after the start of the war in Ukraine. In fact, the deal has reduced corn prices by 26 percent and wheat by 17 percent. This has not solved the famine in some countries, but at least alleviated it.
On Friday, Turkish President Recep Tayyip Erdoğan announced that he had agreed in principle with Russian President Vladimir Putin that the grain deal should be extended again. However, it is not clear whether and for what period of time this should happen. Nor whether there were any concessions to Moscow’s willingness to extend the contract. Last week, UN Secretary-General António Guterres reportedly offered Putin to simplify financial transactions for the Russian Agricultural Bank. In concrete terms, that would probably mean the bank or a sub-organization to be re-integrated into the Swift international payment system. The UN would thus be prepared to lift part of the sanctions imposed on Russia because of the war of aggression against Ukraine in order to extend the grain agreement.
In theory, exports could simply continue
What would happen if Moscow does not extend the agreement is unclear. Strictly speaking, the agreement consists of two agreements, one that Russia and another that Ukraine has signed with Turkey and the United Nations. So there is no direct treaty between Russia and Ukraine. No matter what Moscow decides, the agreement between Ukraine, Turkey and the UN would remain in place.
Theoretically, exports could simply continue if the cargo ship operators venture further into the war zone without Russian guarantees and the insurers do not charge extremely high sums for such trips. A rumor that the Turkish Navy could escort the cargo ships has not yet been officially confirmed. Such a scenario is conceivable, but unlikely.
However, it is just as unlikely that the Russian Navy would dare to attack freighters. Most of the ships that currently carry out exports across the Black Sea do not sail under the Ukrainian flag. It is therefore hardly conceivable that Russia will attack them. The danger from mines should not become any greater than it already is if Russia withdraws from the agreement.
At the beginning of the war, Russian warships blockaded Ukrainian ports. That would definitely be conceivable again as a measure by Moscow. However, it is far from certain whether the ailing Russian Black Sea Fleet would be able to carry out such a blockade at the moment.