Russia pulls out of deal that allowed safe exportation of Ukrainian grain through Black Sea

Open this photo in gallery:

The Kremlin has ended its participation in a deal that allowed for the safe export of Ukrainian grains through the Black Sea, a move expected to lead to a spike in global food prices.

The Black Sea Grain Initiative, signed last July, brought 33 million tonnes of wheat, corn and other grains to market over the past year. The United Nations credited the deal with helping lower food prices by 20 per cent, and the World Food Programme – which is battling food shortages in Afghanistan, Yemen and East Africa – bought 80 per cent of its wheat from Ukraine during the first half of this year.

Kremlin spokesman Dmitry Peskov said Monday that the deal would expire at midnight because Moscow’s terms for its extension had not been met. Russia has complained that barriers remained to its own exports of grains and fertilizer. “When the part of the Black Sea deal related to Russia is implemented, Russia will immediately return to the implementation of the deal,” Mr. Peskov said.

UN Secretary-General António Guterres said he was deeply disappointed that Moscow had rejected his efforts to extend the deal, adding that the collapse of the pact “will strike a blow to people in need everywhere.” Linda Thomas-Greenfield, the U.S. ambassador to the UN, called the Russian move “another act of cruelty.”

The Russian navy controls access to Ukrainian ports, and it wasn’t immediately clear how its warships would deal with any commercial vessels that attempted to sail through their blockade.

A spokesman for Ukrainian President Volodymyr Zelensky suggested that Kyiv was willing to test the response in the name of keeping grain exports flowing. “Even without the Russian Federation, everything must be done so that we can use this Black Sea corridor. We are not afraid,” Serhiy Nykyforov said, quoting the President. “We were approached by companies, shipowners. They said that they are ready, if Ukraine lets them go and Turkey continues to let them through, then everyone is ready to continue supplying grain.”

Russian foodstuffs are not the subject of Western sanctions imposed in response to the war, but measures targeting Russian banks have complicated payments for agricultural products. The Kremlin’s key demand has reportedly been to have the Russian Agricultural Bank reconnected to the SWIFT international banking system.

Mr. Guterres wrote to Russian President Vladimir Putin last week to ask him to extend the grain deal in exchange for the European Union allowing a subsidiary of the Russian Agricultural Bank to resume using SWIFT. That appeal went unanswered.

Pavlo Klimkin, a former Ukrainian foreign affairs minister, told The Globe and Mail that withdrawing from the grain deal was “a game for the Kremlin.” Mr. Klimkin said it made Mr. Putin look tough at home and provided a boost to the Russian agricultural industry, while also probing Western resolve over sanctions. “They believe it would create loopholes in the sanctions regime and solidarity overall. They will keep bargaining for trade-offs.”

Mr. Klimkin predicted that a new deal will be reached when Mr. Putin visits Turkey next month. The Black Sea Grain Initiative was considered a major diplomatic accomplishment for Turkish President Recep Tayyip Erdogan, who has repeatedly sought to act as a mediator between Russia and Ukraine.

Moscow’s announcement that it was quitting the pact came hours after an explosion damaged the Kerch Bridge, which connects Russia to the Crimean Peninsula, a territory it seized and annexed in 2014. A couple, Alexey and Natalya Kulik, were reportedly killed in the blast, and their 14-year-old daughter Angelina was severely injured.

Mr. Peskov accused Ukraine of carrying out a “terrorist attack” on the bridge and said Mr. Putin would chair a meeting of the country’s Security Council to discuss the incident. When the same bridge was damaged by a truck bomb last October, Russia responded with weeks of missile and drone strikes targeting Ukraine’s electricity grid.

Mr. Peskov said Monday’s attack did not influence Russia’s decision to leave the grain initiative, but a subsequent statement from the Russian Foreign Affairs Ministry complained that Ukraine had carried out “provocations and attacks against Russian civilian and military facilities” while the deal was in place. (Russia has repeatedly bombed Ukraine’s ports and agricultural production facilities over the past year.)

Olga Trofimtseva, who until last week served as Ukraine’s ambassador-at-large and acting minister of agrarian policy, said she had expected for weeks that Russia would withdraw from the deal. Ms. Trofimtseva said it was now up to the other parties in the accord – namely Turkey and the UN – to convince Mr. Putin to rejoin the accord. She said China, which had been the biggest buyer of Ukrainian corn exports under the pact, was also in a position to put pressure on Moscow.

“We are waiting for the reaction of our partners, as well as the grain handlers,” she said in an interview. “Are they willing to pay higher costs of insurance and take new levels of risks, in case Russia decides to attack commercial vessels?”

The deal – which saw all ships leaving Ukraine checked in Turkish waters with Turkish, Ukrainian, Russian and UN inspectors present – was the only substantive co-operative effort between Moscow and Kyiv since Russia launched its full-scale invasion of Ukraine in February, 2022.

The last ship to carry Ukrainian grain under the terms of the Black Sea Grain Initiative appears to have been the Turkish-flagged TQ Samsun, which left the port of Odesa on Sunday. However, industry experts say Russia had already reduced its co-operation in recent weeks, allowing ships to leave Odesa and other Ukrainian ports, but then deliberately slowing the inspection process to a crawl.

“The Russian part of the commission has been artificially delaying inspections,” said Pavlo Martyshev, an expert on the agricultural industry at the Kyiv School of Economics. “Ships leave Odesa, but there’s a huge queue in the Bosporus.”

The UN Food and Agriculture Organization said earlier this month that high food prices were driving “worrying levels of hunger” in 45 countries around the world.