One (and only?) year into the Black Sea Grain Initiative, Russia continues to blackmail the world using food
On June 17, Russia announced its withdrawal from the deal that has been crucial for stabilizing the global food market, and just a day later, launched an attack on Ukrainian ports. 60,000 tonnes of agricultural products intended for China were destroyed by Russia’s missile strikes.
Ukrainian grain is essential for the global food system. 400 million people around the world rely on it – and when sea export became impossible due to Russia’s full-scale invasion, prices skyrocketed and entire countries were put at risk of food shortages.
That is why the Black Sea Grain Initiative came into place a year ago. The deal allowed to partially unblock Ukrainian seaports, and since August 2022, Ukraine has been able to export 32,8 mln tons of food to countries in Asia, Africa, and Europe.
And in a year, not much has changed in that regard: people worldwide still depend on Ukrainian wheat, corn, and sunflower, and the Grain Initiative is still essential to ensure it can be delivered. But this food supply chain is, once again, at risk because of Russia.
No extension for the crucial deal?
The Black Sea Grain Initiative was initially signed on July 22, 2022, with one agreement between Ukraine, Türkiye, and the United Nations, and a separate one concluded between Russia, Türkiye, and the United Nations. It allows food and fertilizer to be exported from three Ukrainian ports: Chornomorsk, Odesa, and Pivdennyi.
The Initiative had positive long-time effects:
- in June 2023 grain prices were 23.4% lower than in March 2022, when all Ukrainian seaports were blocked by Russia;
- as of July 2023, the United Nations World Food Programme (WFP) so far procured 80% of this year’s purchases of wheat grain from Ukraine via the Initiative, up from 50% in 2021 and 2022;
- 170,000 tons of wheat were shipped to Ethiopia, Somalia, Yemen, and Kenya under the “Grain from Ukraine” humanitarian program.
The grain deal was extended three times: in November 2022, in March, and in May 2023. Each time, Russia tried to bargain, insert uncertainty, and even shorten the period of the agreement. On July 18, the deal expired – and Russia announced it would not be participating in it any further.
Ukraine, on the other hand, remains committed to its obligations. “Africa has the right to stability. Asia has the right to stability. Europe has every right to stability. And therefore, we must all care about security – about protection from Russian madness,” stated President Volodymyr Zelenskyy on July 17.
Ukraine urges the international community to take joint and resolute actions to ensure that Russia’s food blackmail will not be effective. Ukrainian food exports – and, therefore the well-being of millions of people worldwide – can not constantly rely on Russian approvals. And a year of the Black Sea Grain Initiative, filled with constant sabotage from Russia’s side, might serve as proof of that.
Merely half of the inspections were held
Even though the deal officially expired on July 18, it has not been running at full capacity for a long time now. According to the Joint Coordination Center procedures, all parties must agree on a daily inspection plan for both exit and entry vessels under the initiative. And that is where the majority of delays occur, as the Russian side frequently refused to register and inspect the ships.
Since January 2023, merely half of the inspections from the agreed (including by Russia) plan have actually been conducted. In particular, between June 1 and July 10, only 70 inspections of vessels (both incoming and outgoing fleets) took place out of the planned 150 due to Russia’s refusal to conduct them.
Pivdennyi, one of the three ports included in the Grain Initiative, has been de facto blocked for a similar reason. “The Russians “cross out” all the ships that go there,” states the Ministry of Infrastructure of Ukraine. No vessels have entered the port since the beginning of May.
And those delays, caused by Russian sabotage of the agreement, are not just an inconvenience. For one, they drastically reduce the effectiveness of the whole initiative. As of July 1, 2023, 32.8 million tons of food were shipped to the countries of Europe, Asia, and Africa – instead of the predicted 57 million tons. According to UN data, food exports through the maritime corridor peaked at 4.2 million metric tons in October 2022 and dropped to 1.3 million metric tons in May.
Moreover, those delays increase costs for Ukrainian farmers. Some ships wait for the inspection for weeks, if not months, and each day of this downtime costs them thousands of dollars. In addition, companies have to pay demurrage (fee for container downtime at the port of discharge), and only those losses have reached from several hundred million US dollars to a billion, according to various estimates.
Uncertainty about the sea corridor is also forcing companies to seek alternative river and land export routes that are more expensive. For major Ukrainian agribusiness Kernel Holding, inspection delays have cost $57 million, stated the company’s SEO.
The Ukrainian agricultural sector is under constant attack
The increased cost of the shipment is just a fraction of the challenges Ukrainian farmers have to face since Russia started its full-scale invasion. Ukrainian fields are filled with explosives, warehouses are damaged by the shelling, and thousands of kilometers of fertile land have been turned into battlefields. Ukrainian farmers continue their daily work despite the dangers to provide wheat, sunflower, and corn to those who depend on them worldwide.
Just in a year of the full-scale war, direct and indirect losses to Ukraine’s agricultural sector reached $40 billion.
And this number is growing daily. When Russia blew up the Kakhovka HPP dam in June 2023, the irrigation system in the south of Ukraine was destroyed. It will take 3-5-7 years to restore the irrigation, and in that time, a million and a half hectares will not be used to their full potential, stated Mykola Solskyi, the Minister of Agrarian Policy and Food of Ukraine.
The very next day after the Black Sea Grain Initiative was halted, Russia launched missiles at the ports of Odesa and Chornomorsk. About 60,000 tons of Ukrainian grain were destroyed in one of the terminals in Chornomorsk, reported Mykola Solskyi. The grain facilities that belong to Ukrainian and international traders (Kernel, Viterra, and the CMA CGM Group) were also damaged.
What does Russia want to achieve?
Russian food blackmail boils down to a simple goal: to lift some of the restrictions imposed on the country after it started the full-scale war against Ukraine.
Namely, Russia is trying to force the reconnection of one of the Russian banks – Rosselkhozbank (the Russian Agricultural Bank) – to the SWIFT payments system. While Russia’s food and fertilizer are not subjected to the sanctions, the country insists that those payment restrictions impact their exports.
As part of the efforts to save the Grain Initiative, the Secretary-General of the UN even sent a letter to Vladimir Putin with a proposal to remove hurdles affecting financial transactions through the Russian Agricultural Bank, and simultaneously allow for the continued flow of Ukrainian grain through the Black Sea. But that has not changed Russia’s decision to threaten the world with hunger.
Other demands of Russia include the restoration of the Tolyatti-Odesa ammonia pipeline, the unblocking of the supply of agricultural machinery and spare parts for it, lifting restrictions on insurance and access to ports for Russian ships and cargo, as well as the unblocking of foreign accounts of Russian companies related to the production and transportation of food and fertilizers.
Though Russia withdrew from the Grain Initiative, the agreement between Ukraine, Türkiye, and the United Nations remains in place. Ukraine has sent official letters to the President of Türkiye and the UN Secretary-General with a proposal to continue the Black Sea Grain Initiative or its analog in a trilateral format.
But, unlike the agreements, the question of the safe passage of vessels through the Black Sea can not omit Russia – it is the terrorist state that makes it unsafe in the first place. On June 19, Russia announced that it would treat all ships heading to Ukrainian ports as military cargo carriers.
And that is a challenge that requires a common and strong stance from the international community. Russia can not be allowed to weaponize food for the sake of everyone in this world.