The Black Sea grain deal ends after Russia withdraws

UNITED NATIONS/MOSCOW (Reuters) – An agreement allowing the safe export of Ukrainian grain from the Black Sea for the past year expired on Monday after Russia resigned and warned it could not guarantee the safety of ships, a move the United Nations said would not guarantee the safety of ships. “Dealing a blow to the needy everywhere.”

Moscow suggested that if the demands for improving its grain and fertilizer exports are met, it will consider reviving the Black Sea Agreement. However, UN Secretary-General Antonio Guterres said the UN agreement that helped Russia send shipments over the past year has also been terminated.

“Only upon receiving tangible results, not promises and assurances, will Russia be ready to consider restoring the agreement,” the Russian Foreign Ministry said.

Russia told the United Nations shipping agency – the International Maritime Organization (IMO) – that its “guarantees for the safety of navigation” had been revoked and that “necessary pre-emptive actions, actions and responses to neutralize the threats posed by the Kiev regime in the region would be abolished”. taken.”

On Monday, insurers are looking into whether to freeze coverage for any ships wishing to sail to Ukraine. The reaction in the grain market was modest, with US wheat futures up about 3% while US corn futures up about 1%.

“I think there is a belief in the market that Russia and the European Union have large supplies of wheat that can meet global demand in the coming months as the crops arrive,” a German trader said.

The United Nations and Turkey brokered the Black Sea Agreement in July last year to combat a global food crisis exacerbated by Russia’s invasion of Ukraine in February 2022. Ukraine and Russia are among the world’s largest grain exporters.

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Ukrainian President Volodymyr Zelensky said on Monday that everything must be done so that the Black Sea grain export corridor can continue to be used, his spokesman said.

“Today’s decision by the Russian Federation will deal a blow to people in need everywhere,” UN Secretary-General Guterres told reporters.

Guterres said the United Nations will continue to try to ensure unhindered access to global markets for food and fertilizer products from Ukraine and Russia.

The US ambassador to the United Nations, Linda Thomas-Greenfield, called Moscow’s move an “atrocity”.

The last ship has sailed

Almost 33 million metric tons of corn, wheat and other grains were exported by Ukraine under this arrangement. The last ship left Ukraine under the deal on Sunday.

The Turkish-flagged bulk carrier Tq Samsun leaves the sea port of Odessa, amid Russia’s attack on Ukraine, on July 16, 2023. REUTERS/Serhii Smolientsev/File Photo

To persuade Russia to agree to the Black Sea deal, a three-year memorandum of understanding was struck in July 2022 under which UN officials agreed to help Russia move its food and fertilizer exports to foreign markets.

Russia’s main demands were to resume its ammonia exports via pipeline to the Ukrainian port of Odessa and to reconnect its state agricultural bank, Rosselkhozbank, to the international payments system SWIFT. The European Union cut it off in June last year after the invasion.

Guterres said on Monday that the United Nations managed to create a “dedicated payments mechanism” for Russia’s Agricultural Bank through US bank JPMorgan Chase & Co (JPM.N) and “recently brokered a concrete proposal” with the European Commission to enable Rosselkhozbank. Affiliate to restore SWIFT access.

But he noted that all these efforts will come to an end because Russia’s withdrawal from the Black Sea Agreement also ended its agreement with the United Nations regarding its exports, under which Moscow committed to “facilitating the export of foodstuffs, sunflower oil, and fertilizers to Ukrainian unimpeded-controlled Black Sea ports.”

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global hunger

Guterres made a last-ditch effort to salvage the Black Sea grain deal by writing to Russian President Vladimir Putin on Tuesday to ask him to extend it in exchange for the European Commission’s cooperation on Rosselkhozbank.

In a letter to Guterres on Monday, Russia said the options offered were “unfeasible and will not guarantee the continuation of cross-border financial transactions,” Russia’s deputy envoy to the UN Dmitry Polyansky wrote on Twitter. He said the letter informed Guterres that Moscow was ending the Black Sea grain deal.

EU Commission President Ursula von der Leyen described Russia’s decision as a “cynical move”, adding that the EU will continue to work towards ensuring food security for poor countries.

Turkish President Recep Tayyip Erdogan said he believed Putin wanted the deal to continue, adding that he would discuss it when they meet in person in August.

Russia had agreed three times last year to extend the Black Sea pact, but it also briefly suspended its participation at the end of October in response to a drone attack on its fleet in Crimea.

There has been concern about the impact of the expiration of the agreement on feeding the hungry around the world.

Under the agreement, the United Nations said the World Food Program (WFP) has bought 80% of wheat so far in 2023 from Ukraine — up from 50% in 2021 and 2022. The WFP has shipped about 725,000 metric tons of wheat. Ukrainian to Afghanistan. Sudan, Djibouti, Ethiopia, Kenya, Somalia and Yemen to fight hunger.

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“Children’s rations are being cut every day now all over the world – it’s quite dramatic and this (the deal) was one of the few glimmers of hope in this era of biblical famine,” said Jan Egeland, NRC Secretary General. .

(Reporting by Michele Nichols and Jay Faulkonbridge) Additional reporting by Rachel Moore in Berlin, Michelle Hogan in Hamburg, Emma Farge in Geneva, Pansari Mayur Kamdar in Bangalore, Hussain Hayatsifer and Ali Kokokojmen in Istanbul, and Max Hander in Kiev; Writing by Nigel Hunt, Nina Chestney, and Michelle Nicholls; Editing by David Evans and Grant McCall

Our standards: Thomson Reuters Trust Principles.

As Moscow bureau chief, Jay directs coverage of Russia and the CIS. Prior to Moscow, Jay ran coverage of Brexit as Head of the London Bureau (2012-2022). On the night of Brexit, his team scored one of Reuters’ historic victories – bringing the news of Brexit first to the world and financial markets. Jay graduated from the University of London…

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