SWIFT in exchange for food – Kommersant

Announced for May 5, the discussion of the grain deal by representatives of Russia, Ukraine, Turkey and the UN was postponed to next week – instead, preliminary technical negotiations took place in Istanbul. Judging by the statements made by the parties in recent days, one of the main issues discussed is the removal of restrictions imposed on the Russian Federation on the financial support of Russian grain supplies, including the return of the Russian Agricultural Bank (RSHB) to the SWIFT payment system. Meanwhile, not only the extension of the agreement, but also the development of the situation in the domestic markets of some EU countries, whose authorities have achieved a temporary ban on the import of certain types of grain from Ukraine, apparently depends on the readiness of the European Union to fulfill this part of the conditions of the Russian Federation.

A “high-level” meeting to discuss the terms of an extension of the grain deal expiring on May 18 was supposed to take place on Friday in Istanbul – but at the last moment it was postponed to next week. As representatives of the Turkish side explained, the meeting was postponed due to “the need to hold a meeting with the participation of UN technical staff, Turkey, Russia and Ukraine.” Later it became known that the participants of this meeting on Friday discussed the agenda of the expected negotiations and some “technical aspects”.

The details of the disagreement can be judged from the few official statements made the day before in Istanbul. Thus, Turkish Foreign Minister Mevlut Cavusoglu said that the return of the Russian Agricultural Bank (RSHB) to the SWIFT payment system was on the agenda. UN Secretary General António Guterres also announced plans to resolve the situation with the financial support of the grain deal last week. He called the transaction through a Turkish intermediary bank an alternative to reconnecting the RSHB to the system. However, this construction also has difficulties: they are associated both with the readiness for such an option on the part of Russia, and with the fears of Turkish banks regarding possible sanctions. For example, according to the data ReutersTurkish state-owned bank Ziraat is ready to process payments for grain exports from the Russian Federation only after written approval from the US and the UN.

RecallMoscow still believes that the Russian part of the grain deal, related to the unhindered export of agricultural products from the Russian Federation, is not being fulfilled (that Russia’s claims are not groundless, say the UN and Turkey).

In addition to removing the issue of financial support for supplies, among the requirements of Russia are: the resumption of imports of agricultural machinery, spare parts and services to the Russian Federation, as well as the abolition of restrictions on insurance of Russian ships with grain.

It should be noted that the extension of the agreement, which gives the Russian Federation the opportunity to unload the domestic grain market after a record harvest, has apparently not lost its relevance. This can be evidenced by the data of the UN FAO on world food prices published on Friday. Although the general index rose in April for the first time in a year (the figure was 127.2 points, which is 0.6% higher than in March), world grain prices continued to fall – in annual terms, the price index for them fell by 19.8%. World wheat prices reached their lowest level since July 2021, falling by 2.3% compared to March. The ongoing drop in the “grain” index in the FAO is explained by “large volumes of supply from the Russian Federation”, which, we note, in the conditions of overstocking of the market and difficulties with exports, put pressure on domestic prices.

The extension of the deal and the related issue of the possible return of the RSHB to SWIFT is acquiring new significance for the European Union as well. Recall that due to the dissatisfaction of the Eastern European countries, which suffered from the multiple increase over the past year, the import of Ukrainian agricultural products, the European Commission agreed to ban the supply of certain types of grain from Ukraine to them. Restrictive measures were introduced only for a month – an extension for a longer period is possible, but so far raises questions, including due to price increases associated with the possible rejection of Ukrainian products (see Kommersant-Online, May 2). This month may be necessary for the EU to weigh the risks and benefits of unblocking Russian operations and extending the deal, on the one hand, and lifting restrictions on Ukrainian grain (which, if the deal is not extended, can only be exported through the “corridors of solidarity”), on the other. .

According to the Turkish Ministry of Transport, during the implementation of the Black Sea initiative, more than 29.5 million tons of agricultural products were exported from Ukraine along the grain corridor, 50% of this volume falls on corn, 28% on wheat.

Note that the unclear prospects for extending the deal are already affecting the situation with the export of grain from Ukraine. According to Reuters, fearing that the deal will not be extended, shipping companies either completely refuse to load Ukrainian agricultural products, or seriously limit its volumes.

Christina Borovikova