Turkey throws its support behind Russia in grain deal talks, Moscow demanding some agro-sanctions be eased

Turkey throws its support behind Russia in grain deal talks, Moscow demanding some agro-sanctions be eased
Ankara has thrown its weight behind Moscow, which claims the Black Sea grain deal agreements to ease sanctions on Russia's grain business have not been implemented. / bne IntelliNews
By bne IntelliNews April 28, 2023

Turkish Foreign Minister Mevlut Cavusoglu has thrown his weight behind Russia in the negotiations to extend the Black Sea grain deal, saying the Kremlin’s complaints are “not unfounded.”

The renewal of a deal signed last July that unblocks Ukraine’s ports and allows it to export grain to the rest of the world was agreed in March, but instead of the usual 120 days, Moscow only agreed to 60 days, complain the parts of the deal that allow Russia to also increase its grain exports were being ignored. If the Kremlin follows through on its threats to cancel the deal, Ukraine’s exports of grain will be blocked again from May 18.

Turkey has acted as a broker in the deal together with the UN. On April 27, Cavusoglu said that Moscow's claims on how the deal is being implemented are not unfounded. He also gave some details of what is being discussed.

Russian Foreign Minister Sergei Lavrov met with UN Secretary-General Antonio Guterres at the start of this week in New York and received a letter outlining the UN’s proposals for breaking the impasse. The letter was sent to Moscow for President Vladimir Putin’s consideration and from what little Lavrov said about its contents, it appears that it has some proposals of interest to the Kremlin, although no details of its contents were shared.

Cavusoglu said the issue of Turkish banks mediating in payments for Russian grain and fertilisers is one of the items on the agenda.

Cavusoglu also revealed that the UN Secretary-General and the US and UK governments were being kept abreast of the situation, after the UN chief came up with the idea of Turkish banks being used in the system of payments for Russian food.

It also appears that Moscow has been asking for the Russian Agricultural Bank (Rosselkhozbank) to be reconnected to SWIFT to allow for payments to be made and received, something the West is likely to resist, as it is currently trying to tighten sanctions even further.

Also included in the second part of the Black Sea grain deal dealing with Russia’s demands is the lifting of export restrictions for Russian agricultural products and fertilisers to global markets. Russia enjoyed a bumper grain harvest in 2022 of 155mn tonnes, smashing all previous records, but grain exports were down due to sanctions. Silos are full to overflowing and $3.4bn worth of grain is in danger of rotting in storage as a result. As grain exports are a significant source of foreign exchange earnings for the increasingly cash-strapped Kremlin, Lavrov is pushing hard to have restrictions on grain exports lifted.

In addition to reconnecting Rosselkhozbank to SWIFT, Moscow is also asking for other sanctions relief, including the resumption of supplies of agricultural equipment, components and service maintenance, lifting of restrictions on insurance and reinsurance, lifting of the ban on access to ports, resumption of the work of Tolyatti-Odessa ammonia pipeline, unfreezing of foreign assets and accounts of Russian companies related to production and transportation of food and fertilisers, Tass reports.

The original deal allows Ukraine to export from the Kyiv-controlled ports of Odessa, Chernomorsk and Yuzhny, which have been the subject of a Russian naval blockade.