Russia Exits (And Later Rejoins) Black Sea Grain Deal

Russian Foreign Minister Sergei Lavrov has been negotiating the deal on behalf of the Russians (Wikimedia Commons).

On November 2, Russia rejoined its Black Sea grain export deal with Ukraine, an action that comes after it exited the agreement on October 29 in response to an alleged Ukrainian drone attack on Russian ships in the Crimean port of Sevastopol. 

Signed on July 22, the deal lifted Russia’s blockade of Ukrainian grain exports, allowing agricultural goods to leave the Ukrainian ports of Chernomorsk, Odessa, and Yuzhny unmolested, and ultimately facilitated the export of over 8.5 million tons of grain products from the country, according to EuroNews. 

But as the deal neared its November 19 expiration date, Russian authorities hinted at the country’s hesitance to extend the agreement.

Russia’s government argued that the country’s grain exports continued to face the same barriers as before the signing of the deal, including hindrances on financial transactions, insuring ships, and securing ports of call. Russia also called for sanction exemptions for firms including the Russian Agricultural Bank. 

Russian officials also questioned whether developing countries were actually receiving the grain exports covered by the agreement, as Foreign Minister Sergei Lavrov alleged that developing countries were only obtaining five to seven percent of grain exports under the deal, while EU member states received the rest, CNN reported. Lavrov elaborated on this issue, stating, “European countries say, ‘yes, we receive most of the Ukrainian grain, but then this grain is distributed around the world, including to the poorest countries.’ I would like to have a clearer picture, so we asked the UN Secretariat who is engaged in this operation, and who has all the data, to provide statistics on the movement of grain to the final destination.”

Global wheat and corn futures rose 5.5 percent and 2.3 percent, respectively, following Russia’s exit from the deal. CNN reported that upward pressure on food prices were projected to impact developing countries most, as the Black Sea deal indirectly prevented approximately 100 million people from entering extreme poverty. 

Representatives from the UN and Turkey remained in contact with Russian and Ukrainian leaders, seeking to reestablish the agreement, according to Reuters. Russia initially doubled down on its stance, demanding “real guarantees from Kyiv about the strict observance of the Istanbul agreement,” but  eventually agreed to restore its participation, Moscow Times reported. In an official statement, the Russian Foreign Ministry claimed, “The Russian Federation considers that the guarantees received at the moment seem sufficient and resumes the implementation of the agreement,” according to CNN. 

The same day, wheat futures decreased 6.7 percent, temporarily alleviating concerns of an impending food security crisis, Bloomberg News reported. However, the agreement’s future remains precarious. Russian President Vladimir Putin indicated that Russia reserves the right to exit the agreement at any time, although the country will not hinder the export of Ukrainian grain: the extent to which Russian officials will honor these promises remains uncertain.