Monday, July 17, 2023

Watch: Final grain ship arrives in Turkey after Russia pulls out of Ukraine deal

Holly Patrick
Mon, July 17, 2023 

Watch as a final grain ship arrives in Turkey after Russia halted participation in a UN-brokered deal which lets Ukraine export grain through the Black Sea on Monday, 17 July.

At the outbreak of the war, global food prices soared to record highs due to the interruption of export from Ukraine, which is a major producer of grains and oilseeds.

The deal was struck last July by the United Nations and Turkey in order to try and alleviate a global food crisis by allowing Ukrainian grain blocked by the Russia-Ukraine war to be exported safely.

The announcement came hours after the Crimean Bridge was badly damaged following reports of explosions on the road between Crimea and Russia’s mainland.

Moscow has said that the attack was a strike by Ukrainian sea drones.

Russia’s Investigative Committee has opened a terrorism case.

Ukraine has not officially confirmed nor denied involvement; its military suggested Moscow could be responsible.

 

Guterres: Russia's pull-out of grain deal 'will strike a blow to people in need everywhere'

Elsa Court
Mon, July 17, 2023 

U.N. Secretary-General António Guterres made a statement in reaction to Russia's withdrawal from the Black Sea Grain initiative. "Today’s decision by the Russian Federation will strike a blow to people in need everywhere," he wrote, expressing his regret at Russia's decision.

The deal, which was first brokered by the U.N. and Turkey and signed in Istanbul in July 2022, has ensured the safe passage of over 32 million metric tons of food commodities from Ukrainian ports on the Black Sea, according to U.N. figures.

The initiative also allowed the World Food Programme to ship over 725,000 tons of food to support humanitarian operations in regions like the Horn of Africa, and helped to reduce food prices by over 23 percent since March 2022.

Before the full-scale invasion of Ukraine, the country usually supplied the world with 45 million tons of grain every year. Guterres added that the agreement has "been a lifeline for global food security and a beacon of hope in a troubled world."

"Ultimately, participation in these agreements is a choice. But struggling people everywhere and developing countries don’t have a choice," he wrote, adding that the hundreds of millions of people facing hunger "will pay the price."

The last extension of the grain deal was in May 2023 and was set to expire at the end of the day on July 17, 2023.

Russia informed Turkey, Ukraine and the United Nations that they will not sign an extension. Kremlin spokesperson Dmitry Peskov claimed the reason was that "the part of the Black Sea agreements concerning Russia has not been implemented so far."

Black Sea grain deal collapses as Russia pulls from agreement


Russia Pulls the Plug on Ukraine Grain Export Deal

Megan Durisin and Áine Quinn
Mon, July 17, 2023


(Bloomberg) -- Russia ended the Ukraine grain-export deal nearly a year into the agreement, heightening uncertainty over global food supplies and escalating tensions in the region.

The pact, previously extended in May, will cease to be effective as of Tuesday, the foreign ministry in Moscow said in a statement. Russia had repeatedly threatened to leave the deal, which had marked a rare example of cooperation during its war in Ukraine. The corridor’s shutdown will hit key buyers like China, Spain and Egypt.

“Unfortunately, the part concerning Russia in this Black Sea agreement has not been fulfilled so far,” Kremlin spokesman Dmitry Peskov said, according to Russian news agency Tass. “Therefore, it is terminated.”

The move jeopardizes a key trade route from Ukraine, one of the world’s top grain and vegetable oil shippers, just as its next harvest kicks off. It also comes after Russia on Monday said Ukrainian drones damaged a key bridge to Crimea.

The pact — brokered by the United Nations and Turkey — has ensured the safe passage of almost 33 million tons of crop exports via the Black Sea since it was signed in July 2022, helping world food-commodity prices ease from the record levels reached after Russia invaded. However, it has been bogged down by issues including slow vessel inspections in recent months.

Benchmark Chicago wheat and corn futures initially spiked, before moving lower. The two commodities are the top crops shipped under the deal.

Following repeated disruptions, the shipping corridor was nearly empty before the deal ended, tempering the immediate interruption to world crop flows. The bigger risk lies longer-term, as fractured and costly export logistics could spur Ukrainian farmers to further cut harvests already shrinking under the weight of the war.

Russia cited obstacles to its own shipments and a bias toward Western interests as reasons for discontinuing the pact, though the nation is the world’s top wheat shipper. It said it would be willing to reconsider the deal when its terms are met.

Moscow’s withdrawal from the deal will have multiple implications, according to its foreign ministry. Those include the end of guarantees for navigation safety, the collapse of the maritime humanitarian corridor, and the disbandment of the Joint Coordination Center in Istanbul.

UN Secretary General Antonio Guterres said he deeply regretted Russia’s decision to end the initiative and the assurances over Black Sea shipping security. He also noted that Russian grain and fertilizer exports have normalized, citing industry groups from the country.

Turkish President Recep Tayyip Erdogan said he would discuss the export deal with Russian President Vladimir Putin during their planned meeting in August, or perhaps sooner by phone.

The European Union will continue to help facilitate food exports from Ukraine, European Commission President Ursula von der Leyen said on Twitter. She condemned the “cynical move” by Russia.

When the deal was inked, the UN agreed in parallel to improve access to Russian food and fertilizer exports. Russia has demanded several obstacles be removed to bolster trade — including reconnecting an agricultural bank to the SWIFT international payments system.

No new vessels have been approved to join the Ukraine grain deal since late last month and Russia had blocked one of the three open ports. Ship inspection times have progressively grown longer, with fewer than one cleared per day in the first half of this month.

A lone vessel remained in the corridor Monday — the TQ Samsun — which departed over the weekend from the port of Odesa. The UN said its outbound inspection is underway.

Its closure will heighten reliance on alternate trade routes via the Danube River and Ukraine’s European Union neighbors, although those paths remain expensive and some countries have pushed back against the inflow.

The routes come “at a much higher cost of transport,” said Carlos Mera, head of agricultural commodities market research at Rabobank. “That poses questions about the future production out of Ukraine. Most of the exports will flow, but some stock build-up domestically is unavoidable.”

Some traders have previously signaled interest in continuing Black Sea shipments without the deal, although that would require military and government approval — plus, international support.

“Even without the Russian Federation one needs to do everything to allow us to use this Black Sea corridor. We are not afraid,” President Volodymyr Zelenskiy said during an interview on Monday, according to his spokesman Serhiy Nykyforov.

--With assistance from Daryna Krasnolutska, Firat Kozok and Volodymyr Verbyany.

Why Russia is suspending the Black Sea grain deal with Ukraine

The Black Sea Grain Initiative was implemented last July in a bid to curb the global food crisis worsened by the war in Ukraine

WH calls Russia's decision to withdraw from Black Sea grain deal 'irresponsible and dangerous'



Niamh Cavanagh
·Reporter   Updated Mon, July 17, 2023 

Russia announced on Monday that it was suspending a crucial deal that allows grain to be exported from Ukraine to countries in Africa and the Middle East.

“The grain deal has halted,” Kremlin spokesman Dmitry Peskov said of the Black Sea Grain Initiative. “As soon as the Russian part of the deal is fulfilled, the Russian side will resume the fulfillment of this deal without delay.”

Moscow claimed that the deal had only benefited Ukraine and that Russian exports, such as wheat and fertilizer, had been blocked from foreign markets due to Western sanctions.


Wheat grain at a storage facility in Ukraine in 2016
. (Vincent Mundy/Bloomberg via Getty Images)

Last week Russian President Vladimir Putin asked for the removal of all sanctions against the Russian Agricultural Bank as well as the unblocking of accounts of Russian companies involved in the export of both food and fertilizer.

The grain agreement, which expired on Monday, was brokered in July 2022 by the United Nations and Turkey to allow grain that had been blocked by the conflict to be exported through the Black Sea. It was aimed at alleviating the global food crisis, which had been worsened by the war in Ukraine.

U.N. Secretary-General António Guterres said on Monday that “hundreds of millions of people face hunger and consumers are confronting a global cost-of-living crisis. They will pay the price.” Guterres added that the U.N.’s main focus will be assuring global food security and price stability.

The suspension comes as Kremlin officials accuse Kyiv of a second attack on the bridge that connects Crimea and Russia. An explosion on the bridge in the early hours of Monday morning killed a couple and injured their daughter.
Why halting the grain deal matters

A harvester in a field 6 miles from the frontline in the Dnipropetrovsk region, Ukraine, in July 2022. (Efrem Lukatsky/AP)

Millions of people around the world rely on the farmlands in the Black Sea region, dubbed the “breadbasket of the world,” for food. Nearly 30% of the world’s wheat comes from the fertile fields of Ukraine and Russia, while 75 of the essential oils used in cooking and preparing food are also produced there. Together, Russia and Ukraine account for 20% of the world’s exports of corn, as well as mineral fertilizer and natural gas — both components used in the production and cultivation of grains and seeds.

Russia’s invasion of Ukraine last year caused a disturbance in global supply chains by creating a scarcity of grains and fertilizer. As prices increased and supply decreased, it was those most vulnerable who felt the biggest impact.

According to statistics from the U.N. released this month, more than 35 million tons of food commodities have been exported in the past 12 months from three Ukrainian ports to 45 countries on three continents. “The partial resumption of Ukrainian sea exports ... helped reverse spiking global food prices, which reached record highs shortly before the agreement was signed,” the U.N. said.


A trader carries a bag of wheat imported from Ukraine at an open-air market in Mogadishu, Somalia, on July 15
. (Feisal Omar/Reuters)

Since July 2022, the U.N. World Food Program has transported 799,000 tons of wheat to the countries most affected by starvation, including Sudan, Somalia, Afghanistan, Kenya, Ethiopia and Yemen.

“Failure to renew the Black Sea Initiative today is a huge, life-threatening blow to vulnerable children living in countries in Africa and the Middle East who rely on grain staples,” Nana Ndeda, the humanitarian advocacy and policy lead of Save the Children, said in a statement to Yahoo News.

“The grain deal was a lifeline to millions of boys and girls facing devastating hunger. Not renewing this initiative will prove catastrophic for children around the world and cost thousands of lives.”

Russia halts grain deal in what UN calls blow to needy people everywhere



Reuters
Updated Mon, July 17, 2023

KYIV (Reuters) -Russia halted participation on Monday in the year-old U.N.-brokered deal that lets Ukraine export grain through the Black Sea, causing concern in poorer countries that price rises will put food out of reach.

Hours earlier, a blast knocked out Russia's bridge to Crimea in what Moscow called a strike by Ukrainian sea drones, killing two people. Moscow said it was a terrorist attack on the road bridge, a major artery for Russian troops fighting in Ukraine.

The Kremlin said there was no link between the attack and its decision to suspend the grain deal, over what it called a failure to meet its demands to implement a parallel agreement easing rules for its own food and fertilizer exports.

"Unfortunately, the part of these Black Sea agreements concerning Russia has not been implemented so far, so its effect is terminated," Kremlin spokesman Dmitry Peskov told reporters.

U.N. Secretary-General Antonio Guterres signalled that Russia's withdrawal meant that the related pact to assist Russia's grain and fertilizer exports was also terminated.

"Today's decision by the Russian Federation will strike a blow to people in need everywhere," he told reporters.

Moscow said it would consider rejoining the grain deal if it saw "concrete results" on its demands but that its guarantees for the safety of navigation would meanwhile be revoked.

In Washington, the White House said Russia's suspension of the pact "will worsen food security and harm millions" and U.S. Secretary of State Antony Blinken called it unconscionable.

IMPACT COULD BE PROFOUND IN AFRICA

Ukraine and Russia are some of the world's biggest exporters of grain and other foodstuffs and any interruption could drive up food prices across the globe.

Shashwat Saraf, the emergency director in East Africa for the International Rescue Committee (IRC), said the impact would be profound in Somalia, Ethiopia and Kenya, which have been facing the Horn of Africa's worst drought in decades.

"I don't know how we will survive," said Halima Hussein, a mother of five living in a crowded camp in Somalia's capital Mogadishu for people displaced by years of failed rains and violence.

Ukraine's President Volodymyr Zelenskiy raised the prospect of resuming grain exports without Russia's participation, suggesting Kyiv would seek Turkey's support to effectively negate the Russian de facto blockade imposed last year.

"Ukraine, the U.N. and Turkey together can ensure the operation of a food corridor and vessel inspections, Zelenskiy said in his nightly video message, saying said the world "has the opportunity to show that blackmail is not allowed ... We must all ensure security, protection from Russian madness."

RUSSIAN OFFENSIVE


Ukrainian forces have been striking Russian supply lines as it pursues a counteroffensive to drive Russian forces out of its south and east. On Monday it reported two more civilians killed by Russian forces, which it said had begun a major push in the northeast.

"For two days running, the enemy has been actively on the offensive in the Kupiansk sector in Kharkiv region. We are defending. Heavy fighting is going on and the positions of both sides change dynamically several times a day," Deputy Defence Minister Hanna Maliar, wrote on Telegram.

The armed forces said Russia had amassed a huge array of forces.

"In the Lyman-Kupiansk sector the enemy has concentrated a very powerful grouping. More than 100,000 personnel, more than 900 tanks, more than 555 artillery systems, and 370 multiple launch rocket systems," Serhiy Cherevatyi, spokesperson for the Ukrainian Armed Forces East group, said on national TV.

Reuters was not able to verify the accounts and there was no immediate comment from Russia.

The blast on the road bridge to Crimea could limit Moscow's ability to supply its troops in southern Ukraine, although Russian President Vladimir Putin said the bridge had not been used for military transports for a long time. Partial road traffic had been restored, Russian Deputy Prime Minister Marat Khusnullin said on Telegram.

Earlier, images showed part of the road bridge had come down and traffic halted in both directions, although a parallel railway bridge was still operational. Blasts were reported before dawn on the 19-km (12-mile) bridge, which Putin ordered built after seizing and annexing Crimea from Ukraine in 2014.

Putin told officials Russia would respond to the "senseless" attack.

Ukrainian media quoted unidentified officials as saying Ukraine's Security Service (SBU) had deployed maritime drones against the bridge. SBU spokesperson Artem Dekhtyarenko alluded to the idea that the agency would reveal details after Ukraine won the war, without directly claiming responsibility.

Ukraine says the bridge is illegal. It was hit by a massive explosion and fire in October.

The grain deal was hailed as preventing a global food emergency when brokered by the United Nations and Turkey last year.

Global commodity food prices rose on Monday, though the increase was limited, suggesting traders did not yet anticipate a severe supply crisis.

Western countries say Russia is trying to use its leverage over the grain deal to weaken financial sanctions, which do not apply to Russia's agricultural exports.

Russia has extended the Black Sea deal three times, despite repeated threats to quit. It suspended participation after an attack on its fleet by seaborne Ukrainian drones in October, leading to a few days when Ukraine, Turkey and the United Nations kept exports going without Moscow.

Any resumption of shipments without Russia's blessing would probably depend on insurers. Industry sources told Reuters they were studying whether to freeze their coverage.

"The (key) question is whether Russia mines the area which would effectively cease any form of cover being offered," one insurance industry source said.

(Reporting by Max Hunder in Kyiv, Michelle Nichols in New York, Abdi Sheikh in Mogadishu, Ron Popeski, Lidia Kelly and Reuters bureaux; Writing by Peter Graff and Philippa Fletcher; Editing by Alex Richardson and Grant McCool)


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