Putin has reason to slow down Ukraine grain deal

Senior European officials see little chance that Russia is ready to ease global food pressure by striking a deal to resume vital grain exports to Ukraine, citing the Kremlin crisis as leverage against Kyiv and its allies. sees.

Government and intelligence officials say UN-facilitated talks with Moscow and Kyiv are still struggling to make progress. He asked not to reveal his identity while discussing such sensitive matters. Many issues remain unresolved, a person familiar with the discussions said, including how goods can move to security in and out of Ukraine.

One of the people said the Kremlin had constructed the debate as a means to lift sanctions and intended to use the threat of global hunger as a bargaining tool in future peace talks. The US has not sanctioned any Russian agricultural products in response to the war, saying there is no link between the penalty on Moscow and grain or fertilizer exports from Russia or Ukraine.

Russian President Vladimir Putin’s invasion has caused untold humanitarian and economic devastation in Ukraine and forced millions to flee either internally or to Europe. It has also triggered what many policy-makers said could lead to a spiraling food crisis around the world by cutting shipments of Ukrainian agricultural goods, at a time with prices already rising and shortages in the form of North Africa and Asia. Feeling far away.

With Ukraine’s Black Sea ports of mines and Russia effectively blocking shipping to the region, countries from Turkey to the US are battling for a solution to re-carry Ukrainian grain. Over 25 million tonnes of grain, sunflower oil and other commodities are estimated to be trapped. The government in Kyiv has also accused Moscow of stealing its grain reserves and transporting them to Russia, and of targeting storage facilities with missile attacks. Russia denies using food as a weapon.

According to a person familiar with the talks, Ukrainian and Russian ministers are expected to meet this week in the Turkish city of Istanbul for discussions. The person said the UN-facilitated talks would aim to reach an agreement outlined this month to move 2 million metric tons of grain a month from July.

Russian Foreign Minister Sergei Lavrov met his Turkish counterpart Mevlut Kavusoglu in Ankara last week. Discussions to which Ukraine said it was not invited made no progress.

Either way, Ukraine is unlikely to agree to Moscow’s request to remove mines from ports held by the Russian military to guard against possible attacks. Kyiv has said that it is not convinced by Moscow’s assurances that it will not strike, noting that Russia had also insisted before the war that it had no plans to invade.

The crisis has triggered a rush of contingencies across Europe to extract grain from Ukraine by alternate routes before the arrival of the next crop. President Volodymyr Zelensky has said the amount of grain waiting to be shipped out of Ukraine could reach 75 million tonnes in the autumn after that harvest.

De-mining will take months to complete, even if agreed upon. growOne of the people said that Ain could instead move to the Bosporus via “safe lanes” in Ukrainian territorial waters from three ports in the Black Sea. It is not clear how this would avoid the need for ships to dock and remove mines from ports to pick up grain before sailing through those marked lanes. Cavusoglu said on Wednesday that not all mines need to be evacuated to establish the corridor.

There is a separate discussion between the EU and other countries regarding the use of ports in Poland and Romania and the possibility of rail transport links to onward ports in the Netherlands, Germany and the Adriatic, the person said. President Joe Biden said on Tuesday that the US is working to build temporary silos in Poland and other places bordering Ukraine and then to ship grain on trains.

Mining Ports, Red Tape and Russia Risk Ukraine Grain Stop

Overland routes are likely to be very slow and face their own logistical challenges, including overloaded railway networks, backlog ports in Eastern Europe, and varying railway gauges in Europe. Even if all those issues are resolved, it will not completely replace exports from ports in the Black Sea, the person said.

One official said the biggest issue is the lack of trust in Russia. Putin has directly forced Russia to shut down Ukrainian grain shipments to lift sanctions, and his officials uphold the claim that food shortages are a result of those sanctions.

A senior European intelligence official said Moscow was spreading a similar message through influence and propaganda campaigns in the Middle East and Africa.

The US and European sanctions do not target Russia’s agricultural sector, nor do they target the food supply and transport of agricultural goods. EU sanctions do not prevent Moscow from exporting its fertilizers to third countries. This is even as some shippers, banks and insurers are shying away from trading Russian fertilizer, with the US government now quietly encouraging companies to buy and carry more of it.

Ukraine’s agricultural industry suffers $4.3 billion from war damage

One person said any deal to ship by sea would have to come with assurances that Russia would not target Ukraine’s storage facilities, as well as its transportation and export infrastructure.

Both sides also need to agree to the inspection, with UN-flagged inspectors seen as a possibility. Russia has said it wants to control any such checks, according to the individual.

Other operational challenges include the need to procure larger vessels, how to safely move grain from different parts of Ukraine to ports, and how to insure cargo.

Officials are equally pessimistic about the prospect of a deal that would move Ukrainian grain out through neighboring Belarus, a country that has been used by Russia as a staging point to bring troops into Ukraine.

A senior intelligence official said it is likely that Russia is coordinating with Belarus, which is eager to lift its own sanctions. Ukraine has already refused to use Belarus as a conduit.

bloomberg