Revealed the secret meaning of Moscow’s withdrawal from the grain deal: who will suffer more

“Our exports have developed regardless of this agreement”

Western media continue to search for the secret meaning of Moscow’s withdrawal from the grain deal. According to one of the conspiracy theories popular among unfriendly countries, Russia stopped the Black Sea initiative in order to oust Ukraine from the leaders in the supply of wheat on the world market, take its place and receive additional income from exports. According to the Financial Times, citing sources, the Russian authorities are currently actively working on a new scheme for the supply of grain to needy countries through Turkey. We are talking about volumes up to 1 million tons. Meanwhile, market experts are convinced that Russia would not break the agreement in order to get the “cherished” additional volume of one million tons, against the backdrop of total wheat exports exceeding 50 million. From which it follows that Moscow’s motives are somewhat different.

Russia is actively working on a new scheme for grain supplies to African countries, seeking to minimize the role of Ukraine in the global commodity market, writes the British newspaper Financial Times. The key role in this formula, according to the publication, is assigned to Turkey, through which up to a million tons of grain will be sent to needy countries “on preferential terms” through Qatar.

Meanwhile, during the period of the grain deal, which ceased to exist on July 18, 2023, 32.8 million tons of grain were exported from the ports of Ukraine. Of these, 26.3 million tons went to the European Union and other high-income countries. The share of the poorest countries – Ethiopia, Yemen, Afghanistan, Sudan and Somalia – accounted for less than 1 million tons, says Artem Deev, head of the analytical department at AMarkets.

“It is assumed that Türkiye will become the main channel for the supply of Russian grain abroad. But it already plays the role of both a transport hub and a center for “parallel” imports of technologies and sanctioned goods. For Western countries, this will mean a sharp jump in prices for agricultural products,” says Artem Deev.

Recall that Russia is the world leader in the supply of wheat. The country is already supplying significant volumes of grain to African countries. If you look at the results of the 2022-2023 season, there was an increase in supplies. And we are not talking about supplies under the grain deal – this is purely an export of domestic companies.

“If we talk about the poorest countries, then Russia has supplied and is increasing the volume of deliveries to Mozambique (245 thousand tons last season), Senegal (312 thousand tons), Tunisia (408 thousand tons), South Africa (521 thousand tons), Tanzania (628 thousand tons). We increased deliveries to Bangladesh by 5.8 times to 1 million 855 thousand tons, as well as to Sudan by 2.2 times to 1 million 604 thousand tons. In fact, the total volume of deliveries of Russian wheat to African countries significantly exceeds the 1 million tons that the Financial Times is talking about, ”says Elena Tyurina, director of the analytical department of the Russian Grain Union.

According to her, such a scheme could become another direction for expanding exports, but Russian suppliers are already very actively increasing the volume of deliveries to the poorest African countries.

“1 million tons is not a very big increase against the background of total wheat exports of more than 50 million tons. Despite this, Russian farmers provide the needs of the domestic market to the full extent, she continues. “Meanwhile, next season in Russia, a slight decrease in gross yields is expected, but due to carryover stocks (more than 20 million tons), we will reach the same volumes that were recorded at the end of the 2022-2023 season.”

As for Ukraine, the record year for it in terms of grain exports is the season before the special operation 2021-2022. At that time, the country supplied 3.4 million tons to Egypt (for comparison, the Russian Federation delivered more than 11 million tons to Egypt in the 2022-2023 season), 1.4 million tons to Pakistan (the Russian Federation supplied 2.5 million tons last season, increasing shipments by 11 times).

“Russia is already supplying the poorest African countries with more grain than Ukraine supplied before the special operation. In the 2023-2024 season exports from Ukraine are expected to decrease by 6.3 million tons to 10.5 million tons, Tyurina notes. – The grain deal, from the point of view of the development of wheat exports, did not interfere in any way, but did not help Russia either. Our exports have developed independently of this agreement.”