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Wednesday, March 22, 2023

Russia threatens to stop grain exports – now what?

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The last time Russia blocked Ukrainian Black Sea ports, many countries faced famine. However, the compromise that eased the situation is now coming to an end. What now?

Famine threatened in many countries when Russia, after attacking Ukraine in February 2022, blocked the neighboring country’s Black Sea ports and thus grain exports. A solution was found through the mediation of the United Nations (UN) and Turkey. However, Russia is threatening to let the agreement expire at the end of next week. UN Secretary-General António Guterres is trying to mediate.

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What is the UN Black Sea Grains Initiative?

The blockade of Ukrainian exports and sanctions against Russia have led to sharp price increases for grain and fertilizer, among other things, in the past year. Before the war, Russia and Ukraine provided almost a quarter of world grain exports. In July 2022, the Black Sea Grains Initiative came about between the UN, Turkey, Ukraine and Russia. It permits the controlled export of grain from the Black Sea ports of Odessa, Chornomorsk and Pivdennyj (Yushny). The ships are inspected before sailing through the Bosphorus into the Marmara and then the Mediterranean Sea. Among other things, Russia wants to exclude arms deliveries to Ukraine.

How long is it still valid?

The agreement was initially valid for 120 days until November, and was then extended by a further four months after tough negotiations. According to the UN, it expires on March 19th.

Is this running smoothly?

It runs, but not smoothly. The agreements among the inspectors are difficult, Russia has withdrawn forces and thus reduced the number of inspector teams, according to UN circles. That’s why ships get stuck on the Bosphorus. At the beginning of March, 33 ships were awaiting inspection, according to the center.

Which parts of the agreement benefit Ukraine, which ones Russia?

It is important for Ukraine that exports bring money into the coffers. Thanks to the deal, she was able to empty the granaries in 2022 and thus prepare for a new harvest season. Russia needs UN help to export grain and fertilizers. Western sanctions restrict many Russian businesses. While grain and fertilizers are not directly affected, Russian players are finding it difficult to call at European ports, process payments and obtain ship insurance. That is why a separate agreement between the UN and Russia is required. In it, the UN promises to do everything possible to remove the hurdles that hamper Russian grain and fertilizer exports.

How are exports controlled?

The ships land in a control zone off Istanbul and are checked there for unauthorized cargo. As a result, the control team passes an approval on to the center – or not. The ships may only transport grain, other foodstuffs or fertilizers approved by the center.

How many grain ships are actually sailing?

Since the initiative began, around 900 ships have transported goods from Ukrainian ports. The daily number of ships can sometimes vary greatly.

Is the full capacity used?

A good 23 million tons of grain were exported on this route by the beginning of March. It is currently three to four million tons a month, but the potential would be seven million.

What are the Russian complaints?

Russia complains that Western sanctions continue to hamper its exports. Foreign Minister Sergey Lavrov told his Turkish colleague Mevlut Cavusoglu in early March that the initiative could only continue if the interests of Russian producers of agricultural products and fertilizers were better taken into account. Moscow wants to bring ammonia to the world market again for the production of fertilizers. This used to be mainly via a pipeline through Ukraine, which is now closed. Russia also accuses Ukraine of not getting the grain to poor countries, but instead selling it to Western countries as animal feed for a lot of money.

How does Kyiv feel about this?

An opening of the ammonia pipeline from Tolyatti in Russia to the southern Ukrainian port of Odessa is politically explosive. In return, Kiev has suggested the release of Ukrainian prisoners of war. Prisoner exchanges are now regular, but nothing is known about progress in opening the pipeline. For its part, Kiev wants to ensure that other ports can also be used, especially Mykolaiv. The aim is to export another 25 million tons of grain by July.

How does the United Nations judge this?

UN officials concede that there are problems with Russian exports. “It’s no secret that there are a number of challenges, both regulatory and otherwise, that need to be overcome,” UN spokesman Stephane Dujarric said. For months, more than 250,000 tons of Russian fertilizers exported before Russia invaded Ukraine were stuck in Latvia and other European transit ports because of Western sanctions. The UN in November enabled a first shipment of Russian fertilizers from the Netherlands to Malawi, with similar shipments planned to other African countries. With regard to the ammonia pipeline, UN representatives hope that Kiev will give in.

Do the exports actually reach countries threatened by hunger?

The UN lists Afghanistan, Ethiopia, Iraq and Yemen among the recipient countries. But only small amounts of a few tens or hundreds of thousands of tons go there. The majority has so far been delivered to China: 4.9 million tons, followed by Spain with 4 million tons and Turkey with 2.7 million tons. This says nothing about the final destinations of the deliveries. A good 350,000 tons arrived in Germany by the beginning of March.

Source: Stern

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