Putin slams door shut on any quick revival of Black Sea grain deal

Putin slams door shut on any quick revival of Black Sea grain deal
No dice. Erdogan and Putin had no deal to announce when they emerged from their talks in Sochi. / Turkish Presidency
By bne IntelIiNews September 4, 2023

Vladimir Putin on September 4 appeared to slam the door shut on any prospect of a quick revival of the Black Sea grain deal. He did so despite a meeting in the Russian city of Sochi with Turkish President Recep Tayyip Erdogan, who, even after the unyielding words of the Russian leader, continued to insist that the agreement could be resurrected “in a short time”.

Putin showed no sign of budging on Russia’s withdrawal from the grain deal which until two months ago gave Ukraine safe passage to export its grain via the Black Sea as he accused the West of reneging on promises.

Standing beside Erdogan at a joint press conference after talks, Putin restated Russia's position that it could return to the deal, but only if the West stopped hindering Russian agricultural exports. 

"The West continues to block the supply of grain and fertilisers from the Russian Federation to world markets," Putin said, adding according to remarks reported by Reuters  that the West had "cheated" Russia over the deal originally brokered by Turkey and the United Nations because rich countries got more than 70% of the grain exported under the deal. When commitments previously made to Russia were fully implemented, the Kremlin would be prepared to “reanimate the deal”, he stated.

One of Moscow's main demands is for the Russian Agricultural Bank to be reconnected to the SWIFT international payments system. The EU cut it off in June last year as part of its sanctions response in response to Moscow’s invasion of Ukraine.

For his part, Erdogan said that Russia's expectations were well-known to all and that the shortcomings should be removed. He also called on Ukraine to soften its negotiating position in talks over reviving the deal and to export more grain to Africa rather than Europe.

"Ukraine needs to especially soften its approaches in order for it to be possible for joint steps to be taken with Russia," Erdogan told reporters.

Ukrainian Foreign Minister Dmytro Kuleba, speaking later on in the day on Ukrainian television, responded that Kyiv would not alter its position, but would take note of Turkey's account of the Sochi talks. "We should not continue to be hostages to Russian blackmail, where Russia creates problems and then invites everyone to solve them," Kuleba said.

Western diplomats have briefed media that, ahead of pulling out of the grain deal, Moscow was particularly aggravated because it had become unable to export ammonia, a key fertiliser ingredient, via Ukrainian-controlled territory. 

In further comments, Putin said Western claims that Russia brought on a food crisis by freezing participation in the grain deal were not correct, as grain prices did not rise after Moscow’s departure from the deal. "There is no physical shortage of food," Putin said.

Some analysts see Putin as content that Russia has benefited from withdrawing from the grain deal while also starting a systematic bombing campaign against Ukrainian ports that previously exported Ukrainian grain. The night prior to the Putin-Erdogan meeting brought another Russian drone strike on a Ukrainian grain-exporting port. Warehouses were damaged and buildings were set on fire during the attack on the Danube River port of Izmail, in Ukraine’s southern Odesa region.

More than 220,000 tonnes of Ukrainian grain have been destroyed in the Russian military targeting of Ukrainian grain export terminals, according to Kyiv.

Russia shipped 56m tonnes of grain products under the Black Sea grain deal, generating $41bn in earnings in the process, Western officials claim. But Moscow’s response is that continued restrictions placed on payments, logistics and insurance undermined shipment plans, meaning Western pledges went unfulfilled.

Before Russia exited the deal, it also meant nearly 33m tonnes of Ukrainian grain exports got to global markets. The US claims approximately 20m tonnes of that grain was received by developing countries.

With no agreement on unfreezing the deal, a new phase in the propaganda battle over whether it is Russia or the West that is the true friend of the developing world can be expected. A blotch on Russia’s record here is that it is only the 34th largest contributor to the UN World Food Programme, though it is anticipating a record grain harvest. However, Putin keeps coming up with special deals for developing countries with a particular focus on Africa in the fight for hearts and minds. After his meeting with Erdogan, he mentioned that Russia was close to an agreement with six African countries over a plan to supply Burkina Faso, Zimbabwe, Mali, Somalia, the Central African Republic and Eritrea with up to 50,000 tonnes of grain each free of charge.

The West, meanwhile, will keep hammering away on the claim that poorer countries are set to suffer rising inflation and grain shortages thanks to Russia’s actions.

With no safe passage across the Black Sea, Ukraine is continuing to export grain along maritime humanitarian corridors running across the sea, declared despite no consent from Russia. Three commercial shipments have so far been sent without Russian permission. Moscow has threatened to attack such shipments.

There are also land routes for grain export running through Poland but, compared to sea routes, transit costs are higher, consignment volumes are smaller and delivery times take longer.

Sending shipments of Ukrainian grain along European land routes has also become a sensitive issue, with the so-called “frontline five” – Hungary, Poland, Slovakia, Bulgaria and Romania – that border Ukraine arguing that uncontrolled influxes of Ukrainian produce are hurting their domestic agriculture sectors.

Ukraine is threatening to take legal action if individual EU member states introduce national bans on imports of Ukrainian grain after the expiry of EU-wide restrictions on September 15. It has urged the European Commission to make a “rapid and fitting” reaction if countries such as Poland and Hungary go ahead with their plans. 

The restrictions cover wheat, corn, sunflower seeds and rapeseed.

The Commission has long said that the ban will either apply bloc-wide or it will have to end. Keeping import restrictions in place by individual member states is against EU trade rules, Brussels says.