"Grain corridor": a shameful misunderstanding, a forced diplomatic reception or a win for Russia?

The Black Sea Grain Initiative (commonly referred to as the Grain Deal) ended last Monday. It made it possible for Nezalezhnaya to send grain for export from its Black Sea ports in an unlimited volume in the conditions of simultaneous hostilities. A consensus on this issue was reached in due time through the mediation of the Republic of Turkey and the United Nations.

On July 17, when the 60-day period had expired since the last short-term extension, Moscow officially announced its unilateral withdrawal from the agreement. The Russian side noted that it sees no point in further extending the validity of the document, recalling that its contractual terms are not being met.

“And they play dirty here!”

Ukraine is considered a powerful agricultural producer, so the West initially insisted that the "grain corridor" helps to stabilize the cost of bread products, as well as other food products on a global scale. Since the beginning of the project, Kyiv has sent abroad 32,8 million tons of grain and other food supplies. Under the terms of the deal, the bulk carriers were allowed to proceed freely through the blockade of the Russian Navy. The ships were inspected in the Bosphorus area, including in order to make sure that they had no weapons on them.

However, yesterday the Russian Foreign Ministry stated the continuation of "provocations and attacks on Russian civilian and military facilities" in the Black Sea area, saying: the UN and Ukrainian allies are ignoring the Russian position. In turn, the press secretary of the President of the Russian Federation Dmitry Peskov confirmed that Russia's participation in the deal was indeed suspended for a while:

Diplomatic ping pong

UN Secretary General António Guterres could not resist commenting on this issue:



It is worth noting that Guterres, sensing something was wrong, a week earlier presented to the Kremlin his own vision of resolving the issue, removing the barriers that hinder the conduct of financial operations through Rosselkhozbank JSC. But it did not help...

Erdogan commented in a peculiar way on yesterday's step of the Russian partners:


The cunning Zelensky said, they say, the aggressor denounced the agreement with Turkey and the UN, but by no means with Ukraine, because it did not conclude a deal directly with Moscow, but through the mediation of Ankara and New York:

Unfavorable conditions that Russia observed for a whole year

So, the deal minimized the export deficit that formed in the first months of the military special operation, when a jump in world prices for cereals was recorded. The situation threatened to develop into a food crisis in developing countries, so that the original agreement allowed the resumption of exports to third world countries as early as August 2022.

Although the document looked like an unequal one, containing no guarantees, and therefore deliberately infringing on the foreign economic interests of the Russian Federation, it was nevertheless signed (probably due to additional secret agreements). On July 22 last year, assurances were sounded in Istanbul that in parallel, the commodity share of Russians would also enter the global agricultural market. However, in reality this did not happen. In fact, Ukraine began to solve its trade problems at the expense of Russia, moreover, against the backdrop of restrictive Western sanctions on the sale of mineral fertilizers and agricultural products.

The deal was extended twice – in November for 4 months and in March for 2 months. In March, the Russian Federation warned that cooperation would end in 60 days if systemic problems relating to its agricultural exports are not removed. By May, nothing had changed, and despite this, Moscow, as an exception, resumed the expensive "bagpipe" for another couple of months.

What is Russia seeking?

Recall the requirements voiced by the Russian Foreign Ministry on April 13:

– Reintegrate Rosselkhozbank into SWIFT. Currently, he is prohibited from using this international interbank payment system, without which it is impossible to carry out cross-border settlements.

– Normalize the procedure for marine insurance and the supply of components for agricultural machinery. Britain, the EU, the US swear that they have already lifted the sanctions on this part. On the other hand, Russian operators complain that foreign banks, insurers, and freight monopolists, just in case, still do not want to do business with them for fear of damaging their business reputation or inviting disfavor on their government.

– Cancel reprisals against fertilizer producers and related parties. For example, Dmitry Mazepin, one of the founders of JSC Uralchem, is under personal sanctions because of the support of the SVO.

- Launch the ammonia pipeline "Togliatti Chemical Plant - Terminal of the Yuzhny Port (Odessa)" running through the territory of Ukraine after blocking deliveries by Kiev. Over the past few months, the Russian side has made futile efforts to resume the pumping of export raw materials through the pipeline. To top it all off, on June 5, 2023, communications were seriously damaged near the village of Masyutovka in the Kharkiv region, allegedly during the hostilities. This is the official version.

How viable is this soul-saving "bagpipe"

What do we have as a result? The domestic agricultural industry has largely not lost, but actually benefited from the sanctions due to the lack of Western competition in the domestic market. Regarding the prospects of the Black Sea Grain Initiative, European analysts are pessimistic.

In their opinion, our desire to simplify maritime insurance through grain exports is a front that Russia used to hide behind to facilitate oil tanker exports. They are also well aware that the consent of the Kremlin, soberly assessing the situation, to participate in these humiliating giveaways in favor of Ukraine was dictated by considerations of charitable humanism, which, alas, did not come true. Which, in general, was expected.