Russia reclassifies Black Sea Grain Initiative as a "commercial project"

Russia reclassifies Black Sea Grain Initiative as a
Russia reclassifies the Black Sea Grain Initiative as a "commercial" project as it claims that most of the grain exported from Ukraine has ended up on European markets and only 3% is sold to "countries in need." / bne IntelliNews
By bne IntelliNews May 2, 2023

The Black Sea Grain Initiative has been reclassified as a 'commercial project', as most of the agricultural produce that is supposed to go to needy countries is actually delivered to the EU, according to Andrey Ledenev, Minister-Counsellor of the Russian Embassy in the United States, reported Tass on May 1.

"The disingenuity with which the American side ignores the intertwined nature of the Black Sea Initiative on the export of Ukrainian grain and the memorandum of understanding [MoU] between Russia and the UN on promoting Russian food products and fertilisers to the world markets (which is clearly stated in the texts of the agreements) does not cease to surprise," Ledenev said.

The recent bans imposed by several Central European countries on imports of cheap Ukrainian grain that crashed the local markets have demonstrated that the largest part of grain exported from Ukraine has been sold to EU countries and only 17% has ended up in Africa and other emerging markets (EMs).

The Black Sea grain deal was renewed in March, but the Kremlin has been complaining that a deal to ease sanctions on Russia’s own grain exports is not being adhered to. In previous rounds the grain deal ran for 120 days, but the Kremlin is threatening to cancel the agreement after only 60 days this year – on May 18 – unless these obligations are met. The Russians are also demanding that sanctions on banks associated with grain exports be lifted.

Russia Foreign Minister Sergei Lavrov butted heads with UN Secretary-General Antonio Guterres last week on the grain issue, who gave Lavrov a letter with a proposed compromise. That letter was sent to President Vladimir Putin in Moscow, where it is now under consideration.

But Ledenev says out that there is still no progress in resolving financial and logistical problems with shipments of Russian grain and fertilisers. According to him, it is difficult to import agricultural equipment to Russia and ammonia via the Togliatti-Odessa pipeline, as it is "not functioning”, which are amongst the Russian demands. Ledenev believes that "the Black Sea Grain Initiative appears to have transformed into a commercial project", Tass reports.

The issue of extending the grain deal was discussed last week during telephone talks between Putin and his Turkish counterpart, Recep Tayyip Erdogan. Kremlin spokesman Dmitry Peskov said on April 28 that the Istanbul agreements were not being implemented in terms of conditions concerning Russia, and in this regard, the prospects for extending the deal "are not very good."

Ledenev added that there is a lack of interest in the humanitarian component, and the US is only preoccupied with the uninterrupted supply of Ukrainian grain to European markets. The diplomat stressed that "in fact, the Black Sea Grain Initiative appears to have transformed into a commercial project." According to him, from almost 29mn tonnes of agricultural products exported from Ukrainian territory, only 2.6% were sent to the nations in need.

The agreements on the export of food from Ukraine were concluded on July 22 for a period of 120 days. One of the agreements regulating grain exports from the Kyiv-controlled ports of Odessa, Chernomorsk and Yuzhny. The other deal signed between Russia, Turkey, Ukraine and the UN provides for the establishment of a four-party co-ordination centre whose representatives inspect grain ships to prevent arms smuggling and false flag operations.

According to the newspaper Hurriyet, the Turkish side will discuss the problem with representatives of the UN, the US and the UK in the coming days.