Grain deal “went down in history”: Russia withdraws shipping safety guarantees

The grain deal “has gone down in history,” said Turkish President Recep Tayyip Erdogan. On July 17, the day the grain agreement expires, Russia notified Ukraine, Turkey and the UN of its objections to extending the document. The Kremlin said the deal was effectively suspended until Russia’s conditions are met. The economic results of the Black Sea initiative, full of contradictions, were summed up in an interview with MK by the president of the Russian Grain Union (RGU), Arkady Zlochevsky.

– Can you name any final result for our country from the grain deal?

– Russia only suffered damage from this deal. She didn’t give us anything. I hope that now the losses will be at least leveled, and at the maximum they will stop altogether. Russia on average lost from $10 to $20 per ton of grain sent abroad because of the risks associated with its supply. The maximum discount with which we traded was up to $70. These financial losses are solely a consequence of the grain deal.

– Why did it happen? After all, the original intention was different?

– The grain deal was supposed to facilitate our grain supplies (ships entering ports, freight, obtaining insurance). However, none of this was done. As a result, no compensation for financial damage occurred at all. In particular, for this reason, Russia decided to withdraw from the grain deal. I initially thought that such an agreement would not give anything good to our country.

– Russia suffered losses, but did not withdraw from the agreement for a long time. Why?

– Apparently, someone still hoped that the conditions set by Russia would be met, that we would get some benefits from this.

– How will the termination of the agreement affect our export interests?

– Withdrawal from the deal will have a positive impact on Russia. We will remove the discount on grain, and our goods will correspond to world prices.

– How much Ukrainian grain was exported under the grain deal?

– As part of the agreements, about 33 million tons were exported.

– The financial losses of Kyiv after the break of the grain deal will amount to $500 million monthly. This conclusion was made on the basis of UN data, according to which Ukraine’s exports during the deal amounted to $9.8 billion. Do you agree with this assessment?

– It’s some kind of nonsense. Ukraine exported 33 million tons per year. The average price per ton, which was exported, was about $250. And, it should be taken into account that within the framework of the deal, the volume of grain was exported by sea, which was previously delivered abroad by land routes: by rail, by road. It turns out that the completion of the grain agreement will lead to the fact that this volume will return to land channels. Therefore, losses cannot be calculated in such amounts.

– The Russian Foreign Ministry said that if the Western countries value the grain deal, they must fulfill their part of the agreements: withdraw Russian fertilizers and food from sanctions. Will they go for it?

– All the difficulties that Russia had in the framework of the grain deal appeared as part of a large-scale sanctions campaign against our country. Well, you can’t order firms, for example, which are engaged in freight, to unquestioningly allow their ships to enter Russian ports for loading. Why don’t they come in? Because the tanker, which they will allow, then, under sanctions pressure, will not enter the European port. There is no order to fix this.

– Initially, the deal was explained by ensuring the global food security of the poorest, and especially African countries. Meanwhile, it became known that these states received only 10% of corn and 40% of wheat sent under the grain deal. Why?

– Because talking about helping those in need is a fiction. Deliveries of Ukrainian grain were not tailor-made for African countries in need of food. It was a PR hysteria, not based on any foundation. What did she lead to? To a frenzied increase in grain prices. The whole argument about the need for this Ukrainian grain deal in relation to poor countries looks ridiculous, if not absurd.

Help “MK”:

The agreement on the export of grain from Ukrainian ports was signed by Russia, Ukraine, Turkey and the UN in July 2022. It was extended several times, but at the next approval of the deal in May 2023, the Russian Foreign Ministry named five conditions necessary for this. Among them were the connection of Rosselkhozbank to the SWIFT system, the supply of spare parts for agricultural machinery, the unblocking of transport logistics and insurance, the resuscitation of the Togliatti-Odessa ammonia pipeline and the “defrosting” of the assets of Russian companies. The requirements were not met. The Kremlin said that on July 18, the Black Sea initiative ceases to function, the joint coordination center in Istanbul will be disbanded. Turkish President Recep Tayyip Erdogan noted that the grain deal prevented the food crisis. He also expressed hope for negotiations with Putin on this issue.