On October 29, 2022 Russia announced it had quit the
grain deal brokered by the UN and Turkey in July 2022 to allow Ukraine to
export grain by the Black Sea. Moscow’s move was in response to an attack by
Ukraine on the Russian fleet around Sevastopol city. Despite Russia’s warnings,
a group of ships loaded with grain nonetheless exited through the
safe corridor, exporting grain that had been loaded in Ukrainian ports.
Shortly thereafter, Russia made a U-turn and announced
it would return to the agreement after negotiations with Turkey. Moscow
cited written guarantees from Ukraine that Kyiv would not use this corridor for
military purposes or attacks against Russia.
This brief spat over the deal, which to that point had
worked for all parties, left a mixed impression. On the one hand, Russia’s
actions underscored that the agreement was vulnerable and weak, and made clear
Moscow’s readiness to abandon it at any moment it saw fit. On the other hand,
Turkey’s intervention, which secured the continuation of the deal and convinced
the Kremlin to rejoin it, illustrated the significant influence Ankara wields
in the Black Sea, both as a key interlocutor between parties and as a
counteracting player to Russia.
Russia’s move was inevitable. From the very beginning Moscow
has seen the grain deal as affording it leverage over Ukraine and the West.
Grain exports are one of the few sources of hard-currency income for the
Ukrainian economy. What is more, being a security guarantor of the agreement
allows Russia to raise the stakes with minimal effort every time it wants to
pressure the West by destabilizing world food prices, which in turn has an
impact on inflation worldwide. Indeed, Russia’s brief suspension of its
participation in the grain deal caused a spike in wheat prices across
the globe.
The most obvious goal of the deal was to ensure food
security. Russia’s invasion of Ukraine caused a surge in global food prices,
dealing a heavy blow to countries already at risk of food insecurity. Ukraine
has been one of the world’s largest exporters of grain, contributing
42% of the global share of sunflower oil, 16% of maize, and almost 10% of
wheat. Not only are Ukraine’s exports essential for the stability of world
markets, but Ukraine’s grain exports have also contributed greatly to the
World Food Program’s humanitarian stocks, shipped regularly to such war-ridden
countries as Yemen, Ethiopia, Somalia, and South Sudan.
The July agreement between Russia and Ukraine allowing grain
and fertilizers to return to the market probably averted a humanitarian
catastrophe and economic meltdown. Since the signing of the deal, around
9.5 million tons of grain products have left Ukraine by sea. More than 100
ships have sailed from Ukraine, with 47% of the grain cargoes going to Turkey
and Asian countries, 36% going to the EU, and 17% to Africa. Immediately after
the agreement went into effect, food prices fell by 7.90 percent since
March 2022. After hitting an all-time high immediately after Russia’s invasion
in February 2022, world wheat prices dropped by 14.5% and cereal prices dropped
by 11.5%. Prices for those grains are still higher than they were in 2021, but the
deal certainly eased pressure on the market. In terms of stabilizing markets,
the deal has proved to be effective.
However, the agreement was not designed to save
conflict-affected communities around the world, which for the most part
continue to suffer critical food shortages. Particularly, Russia has constantly
criticized the agreement, alleging that the grain is not reaching countries
that need it the most.
Indeed, contrary to popular perception, the majority of
grain exports that were shipped out of Ukrainian Black Sea ports didn`t go to
the poorest and most needed countries but rather to Europe and Turkey. Over the
past five months, more than 12.3 tons of grain was shipped from Ukraine,
with 44% of it being corn rather than wheat. The main destinations of the
cargoes were Spain, China, Turkey, Italy, and the Netherlands.
Most of the grain that had been held up in Ukrainian silos
after February 24 was corn, contracted by international companies, not
necessarily to feed people but, for example, to use as biofuel or animal food.
Therefore, the agreement wasn’t designed to immediately avert famine in
countries like Yemen or Somalia but rather to stabilize the market and contain
prices, which in turn hurt countries’ ability to purchase food.
From the Ukrainian perspective the agreement has positive
implications. It allowed Ukraine to return to almost prewar amounts of
exports, increasing its share from 1–1.5 million tons to almost 4 million tons.
In addition, the deal freed up some space for
Ukraine to store the next harvest, which is expected to amount to 53
million tons, far exceeding domestic needs. The deal allows Ukrainian farmers
to start planting crops for next year.
The deal also ensures that Ukraine’s farming sector is not
totally destroyed. Because of the war, Ukraine’s farming industry has lost
50% of its 2021 gross output, which has led to serious liquidity
problems for farmers. The grain had to be moved out of storage silos to avert a
storage crisis, and if the whole goal of the deal was to move grain out of
Ukraine, then the treaty made it possible.
Any hope that the grain deal might serve as a basis for the
slow build-up of a potential compromise between Russia and Ukraine/the West has
been dashed.
Ukraine and Russia don’t trust each other and are not ready
to negotiate. Russia’s attempt to abandon the deal demonstrated that Moscow
doesn’t see it as a trust-building measure but rather is trying to
instrumentalize it as part of its war effort. Nor does Ukraine see the
agreement as part of a potential peace process. President Zelensky insists that
Russia should leave all Ukrainian territory occupied since 2014, including
Crimea, no matter whether there is a grain agreement in place or not.
If the agreement is thought of as a means of stabilizing the
Black Sea situation and localizing the war in Ukraine, then one could argue it
has partially succeeded. Although Russia didn’t stop its indiscriminate attacks
against energy, military, and civilian infrastructure in Ukraine’s South, it
did show restraint toward foreign ships, which started shipping grain out of
Ukraine through the Turkey-supervised safe corridor. In some way, the agreement
has contributed to the creation of certain rules.
Finally, if the agreement was about strengthening Turkey’s
geopolitical leadership in the region, then it has definitely succeeded. Ankara
boosted its diplomatic image by presenting the agreement as an achievement
aiding food-dependent African and Asian countries. Moreover, Turkey cemented
its role as a key mediator in the Russia-Ukraine war, capable of talking to
both sides. President Erdoğan in particular has been able to capitalize on the
deal by placing Turkey at the heart of any potential follow-up agreements
between Kyiv and Moscow.
