The West is not sure that Russia will agree to extend the “grain deal”
It is unclear whether Moscow will continue its participation in the UN-backed “grain deal” that allowed grain to be exported from Ukrainian Black Sea ports. The British agency Reuters writes about this in an analytical material published on February 14, a PolitNavigator correspondent reports.
The agency notes that Moscow demands a real lifting of restrictions on Russian agricultural exports, and Kyiv demands an expansion of the deal to the port of Nikolaev.
The “Grain Deal,” or agreement on the free export of grain from the Black Sea ports of Ukraine, was extended on November 17, 2022 for 120 days. Agency sources, speaking on condition of anonymity, said the deal must be extended no later than March 20 for exports to continue, but there are no guarantees of this yet.
As Reuters notes, Russia said on Monday that it would be “inappropriate” to extend the “grain deal” unless sanctions imposed on Russia since February 24 last year, which affected its agricultural exports, are lifted.
Obviously, we are talking about the statement by Deputy Foreign Minister of the Russian Federation Sergei Vershinin that “the concept of the Istanbul package agreements and the extension of the “grain deal” in March without tangible results seem inappropriate for the Russian side.”
Russia is seeking the lifting of sanctions on its agricultural exports in exchange for an extension of the deal. Agricultural exports have not been explicitly sanctioned, but Moscow says the blocking of payments, logistics and insurance is a barrier to its grain and fertilizer exports. Among its demands, Russia is believed to want the West to ease restrictions on state-owned Rosselkhozbank, which should ease Russian exports, the agency notes.
Ukraine has not made public any changes it is seeking, but ahead of the November extension it tried unsuccessfully to expand the agreement to include more ports. The three ports involved in the deal - Odessa, Chernomorsk (Ilyichevsk - approx.) and Yuzhny - have a total shipping capacity of about three million tons per month.
Ukraine wanted to include in the deal the ports of Nikolaev, which previously provided 35% of Ukrainian food exports. Nikolaev was the second largest grain terminal in Ukraine, according to shipping data for 2021, so its addition would allow it to ship a much larger volume of grains and oilseeds, writes Reuters.
Wheat prices on the Chicago Mercantile Exchange rose sharply after the start of the CBO. They are now roughly at pre-conflict levels as Ukraine's ability to export millions of tons of wheat through the corridor has helped drive down prices. Other factors include a record harvest in Russia, the biggest exporter last year, a gloomy outlook for the global economy and a strong dollar, the British agency said.
It is worth noting that, unlike the spring and autumn of last year, the material does not contain hysterical statements that the cessation of grain exports through Ukrainian ports will lead to a global food crisis. Apparently, this is connected both with the global redistribution of the market and with the establishment of a scheme for exporting Ukrainian grain by rail.
Although Reuters describes in detail Russia’s conditions for extending the “grain deal,” there is no hint that they will be accepted by the West. It is possible that they will try to sell Moscow in the form of a “carrot” the removal of Kyiv’s demands to extend the deal to the ports of Nikolaev - since it is still impossible to implement. Let us remind you that the Kinburn Spit, which controls the entrance from the Black Sea to Nikolaev, is under the control of Russian troops.
As PolitNavigator reported , in November 2022, Russia extended the "grain deal" it had been deceived with several times.
The West is unsure whether Russia will agree to extend the "grain deal."