Russian-Ukrainian grain export dispute: Why Russia Refused to Be Stung Further.

Written by – Elijah J. Magnier: 

In the aftermath of the Moscow-Kyiv “grain export agreement” facilitated by Ankara, tensions have escalated as Russia has reportedly launched attacks on Ukrainian ports, jeopardising grain shipments via the Black Sea. Once a tranquil sea route, the Black Sea has been transformed into a war-torn battleground, mirroring the escalating conflict on land. Amid this upheaval, Russia has cited Western sanctions as an obstacle to implementing the agreement, claiming that the West’s inability to facilitate payment for exported grain and fertiliser led to its termination. 

While Russia maintains that it has complied with the agreement, allowing Ukraine to lucratively export grain and earn substantial revenues, Western powers, particularly the United States, have been accused of maintaining sanctions against the Russian Central Bank, further exacerbating the situation. This raises a puzzling conundrum: why does the West insist on exporting only Ukrainian grain while flouting the terms of the agreement with Russia and denying dozens of countries access to their needs?

Western-Ukrainian cooperation has been explored to find alternative export channels, including Croatian ports and land routes via Poland and Romania. However, prohibitive costs have forced reliance on Black Sea routes. This shift has raised concerns about maritime security, leading to potential increases in shipping insurance rates and possibly grain prices. 

Despite this, Washington’s pursuit of the ‘Black Sea Initiative Agreement’ appears to have taken an alternative course, with the US exploring ways to export Ukrainian grain that deviate from the UN-sponsored agreement. One year into the grain deal, Russia has vowed not to tolerate further deviations and is determined to resist deception. 

Ukraine has exported some 33 million tonnes of grain, including 9 million tonnes of wheat. China, Turkey, Spain and various European countries are the primary beneficiaries of these exports. Africa imported only 4 million tonnes of Ukrainian grain: 1.6 million tonnes went to Egypt, and the rest to countries with less economic capacity. This export enterprise has generated an impressive $9 to $10 billion, crucial to Ukraine’s wartime financial commitments.

For Ukraine, the financial inflow from grain exports is crucial to sustaining its war effort. Withholding grain exports could turn Ukrainian public opinion against the political …

Subscribe to get access

Read more of this content when you subscribe today.

leadership, particularly among farmers and transport companies, and thus undermine the Western war effort against Russia. Consequently, the US is keen to provide international support and aggressive anti-Russian media coverage for Ukraine’s grain exports, as these funds indirectly reduce the financial burden on Western countries whose leaders are still willing to see the war continue. In addition, stopping the flow of Ukrainian grain would undoubtedly cause panic among European importers. It could force these European states to turn to Russia, the world’s most important exporter of grain and fertiliser, as an alternative. European leaders would only survive domestically with less wheat available to their people if they pursued a pro-American policy compatible with the European people’s interests. Russia, for its part, is aware of the strategic implications of securing domestic agricultural exports and providing assurances to its farming community while maintaining stability within its borders. Moreover, President Vladimir Putin is willing to support Ukraine’s economic aspirations by allowing grain exports and revenue collection in exchange for reciprocal concessions, such as Russia’s use of the Swift payment system to settle the price of its grain exports. 

However, the West’s reluctance to honour its commitments to Russia raises questions about the feasibility of implementing the agreement. Despite UN efforts, this reluctance has led to speculation about Western intentions, possibly aimed at exerting domestic pressure on Putin and perhaps fomenting internal unrest. 

The Western pretext of ‘food security’ needs to be more convincing in light of Putin’s commitment to support less wealthy nations with grain and fertiliser supplies and to offer discounted prices to those in need. Russia, which accounts for a staggering 20% of world grain exports, has increased production by more than 23% this year to 55 million tonnes, strengthening its ability to meet market demand. At this month’s meeting in St Petersburg, Putin told African leaders he was prepared to cancel $23bn of their debt and provide the poorest countries with free grain and fertiliser. Russia’s offer provoked a sharp reaction from Brussels, where Joseph Borrell warned African and European countries against becoming too dependent on Russia for the “cheap grain” on request. Although Borrell claimed that the Russian grain was not subject to Western sanctions, he declined to comment that one of Moscow’s main demands is the reconnection of the Russian Agricultural Bank to the SWIFT international payment system, which the EU cut off in June 2022.   

While Ukraine’s recent claim that Russia destroyed 40,000 tonnes of Ukrainian grain by bombing ports has attracted attention, it may be part of a media campaign to marginalise Russia and secure a lopsided grain export deal. President Putin’s resolve remains unshaken despite pressure from Turkish President Recep Tayyip Erdogan, who has stressed the importance of Russia’s role in the grain export deal and the need for all parties to respect the grain deal in all its parts. 

Erdogan’s diplomatic challenge to influence Putin illustrates the broader complexities at play. The fallout from America’s unwillingness to abide by the terms of the Russia deal adds another layer of intrigue to the saga and raises questions about Washington’s motives. The possibility of blaming global food shortages on Russia to exploit its grain sales is a strategic manoeuvre aimed at cornering Moscow and using Turkey’s geopolitical position. Washington hopes the Turkish president will succeed in cornering his Russian ally because Ankara controls the entrances to the Black Sea. Putin needs his Turkish ally, a member of the NATO alliance and an important economic partner for Moscow.  

However, President Putin could propose a solution that involves the collection of grain from Russia and Ukraine in Turkey as a collection and delivery point, thus addressing some of the concerns. Turkey would collect the price on behalf of both nations and redistribute the money to each side. Such a plan is only feasible if the US is sincere about allowing all nations in need to receive their share of grain and fertiliser from both exporting countries. As United Nations Secretary-General Antonio Guterres aptly says: “The problem is not the food available, but the access to it. 

Ultimately, the situation highlights the complex political, commercial and media manipulation mix that affects grain prices and global markets. As poorer nations gravitate towards Moscow while the West distances itself, the effectiveness of isolating Russia through grain disputes remains to be seen. If circumstances dictate, China and Turkey could turn to Russian grain, further complicating the geopolitical web and disrupting the West’s goal of weakening the Russian economy and turning Russians against their president. Amid these challenges, the Kremlin will stand its ground, unwilling to give in to unilateral agreements that do not address its concerns.