Introduction:
On July 17th , 2023, Russia announced its withdrawal from the Black Sea Agreement on the export of grains, which was signed almost a year ago between Russia and Ukraine under the joint sponsorship of Turkey and the United Nations. This decision is considered an escalatory step on the part of Russia in response to the continued support of the United States and NATO countries in strengthening the strategic position. And Ukraine’s military forces in the war, and encouraging it to continue the counterattack, and even encouraging it to cross some red lines for Russia, including striking and targeting some facilities inside Russia, using drone weapons, especially after the recent movements of NATO at its recent summit in Lithuania, and this analysis examines the implications of this step, its dimensions and potential effects, as well as the expected scenarios.
First: Backgrounds to the decision to withdraw from the Black Sea Cereals Initiative:
Russia’s decision to withdraw from the Black Sea Grain Initiative, which took place on July 17th, represented an expected step on the part of observers, especially since Russia had previously withdrawn from the initiative in November 2022, for objective reasons from Moscow’s point of view, including the West and rich countries benefiting from the largest share of this initiative. While developing and poor countries did not benefit from it, especially in Africa, in addition to the continuation and expansion of the sanctions approach against Russia and the encouragement of other countries to join, directly and indirectly, the sanctions policy, including African countries. Russian circles believe that these same reasons have not changed, despite Turkey and the United Nations’ pledge last November to respond to Russian demands regarding the initiative in accordance with the necessary guarantees.
The decision came into effect after the spokeswoman for the Russian Foreign Ministry, Maria Zakharova, announced that Russia had informed Turkey, Ukraine, and the United Nations Secretariat of its withdrawal from extending the “Grain Agreement,” which would have repercussions on the international scene, given the effects that would ensue. This international move, as Ukraine and Russia are major grain producers around the world; They represent 29% of wheat exports worldwide, and therefore the cessation of this agreement will affect the world’s economies. It goes without saying that the Russian-Ukrainian war has led to a global grain crisis that emerged after the outbreak of this war in February 2022, and on July 22nd, 2022. An agreement was reached between the United Nations, Turkey, Russia, and Ukraine to open a safe humanitarian maritime corridor in the Black Sea known as (the Black Sea Grains Initiative). The agreement allows the passage of foodstuffs to many regions around the world, provided that Russian grains and fertilizers are allowed to reach global markets, provided that Its validity period shall be (120) days, subject to renewal. This agreement has previously been extended (3) previous times, the last of which was in May 2023. Through this agreement, (30) million tons of grains and other food products were exported, which confirms the feasibility economics of this agreement.
Second: Reasons for the current decision:
Russia bases its position on withdrawing from the agreement on the statement that there is Western intransigence towards it that has made this agreement “useless”, and that even before the decision to withdraw, the agricultural crops and grains that were transported according to the agreement were (1.3) million tons in May 2023 and did not The crossing of any new ships within the framework of this agreement has been recorded since the end of June of the same year, as Russian convictions regarding withdrawal from this agreement are limited to the following points:
Moscow believes that it is still under the economic sanctions imposed on it since the beginning of this war.
Russia was unable to increase its share of the export of fertilizers and other agricultural machinery, as Moscow also accuses the United Nations of not adhering to what it pledged to guarantee the facilitation of Russian exports abroad.
– The West continues to expand the circle of economic sanctions to include individuals and businessmen affiliated with the Russian government and the Russian Agriculture Bank to intimidate other countries from dealing with Russia.
– The Russian position came after demands that had previously been referred to by its politicians for the need to stop Western intransigence towards it and implement what was stated in the terms of the agreement following its signing in July 2022, as Moscow threatened on March 5th, 2023 to withdraw its support for the grain export agreement if the sanctions imposed on it were not lifted. Its exports of agricultural products, in addition to unfreezing transport logistics and insurance, unfreezing Russian assets and resuming the gas pipeline to the ammonia line, and this was stated by the spokeswoman for the Russian Foreign Ministry as she indicated that her country would prolong participation in the grain export agreement if it was to the benefit of all, But without turning a blind eye to Russian demands.
Russia believes that the majority of the grain deal has reached European countries and that the biggest beneficiary of this agreement is the large and economically powerful countries. Therefore, it wants to sign bilateral agreements with African or Asian countries that need grain, which will be more beneficial than signing this agreement that led to exploitation. Major food grain states are making political gains.
Third: Expected crises for global food security:
It is clear that this initiative appeared to avoid a global food crisis, given the size of Russia and Ukraine’s contribution to the export share of some strategic crops, especially wheat and corn, and some important products such as fertilizers and others. Therefore, freezing or canceling them would lead to an increase in food prices worldwide, unless… Alternative solutions have been reached for this initiative, such as a proposal for bilateral tracks that Russia wants to develop bilaterally with importing countries, without the need for the presence of a third party (Turkey) or a guarantor party (the United Nations).
In this context, the World Food Program announced in June 2023 that there are humanitarian crises expected to occur in a number of regions around the world, something that the world has not witnessed in more than 70 years, and that there are (772) thousand people around the world on the brink of famine, despite this. Although this agreement has contributed to increasing the supplies transported by the World Food Program – under an initiative – that directly supports people in need in humanitarian crises, it is therefore likely that the prices of some basic foodstuffs will rise as a result of the Russian withdrawal from this agreement.
As of July 2023, the World Food Program has purchased 80% of its global stock of wheat grains, an increase of 50% over the years 2021 and 2022. However, despite this, it is expected that the decision to stop the agreement by Russia will lead to an escalation of financial and economic crises for many countries, especially the developing world, given that it is the largest beneficiary of the agreement, as about 64% of wheat and other food grains such as corn reach it.
In connection with the above, Russia’s suspension of the Black Sea Agreement may lead to a decline in wheat cultivation in Ukraine, which is considered a global supplier of wheat around the world. It is expected that Ukrainian wheat cultivation will decline by 20% for the third year in a row, which will affect the supply of major grains to a number of countries in Africa and the Middle East. As soon as the cessation of this agreement was announced, wheat prices rose to 3%, after an index had been recorded. Food prices according to the Food and Agriculture Organization of the United Nations (FAO) have recorded a steady monthly decline since the year 2022 by more than 23%. This likely means that global stocks of food and grain prices may witness a rise in the coming period and a decrease in inventory means an increase in prices.
Fourth: Freezing the grain initiative and the course of the war in Ukraine:
It is clear that this decision regarding the grain initiative will have consequences on the course of the Russian-Ukrainian war, given the presence of some Ukrainian ports that were previously allocated for the benefit of maritime transport lines and operations and ship movement in the Black Sea. In this regard, the following is expected:
- Targeting ports in Ukraine: Russia announced that its withdrawal from the agreement means that its government has removed guarantees of safe navigation in the Black Sea. The Russian withdrawal may lead to seeking greater control over the ports in Ukraine in order to prevent any attempts to continue exporting grains as a pressure card on European countries and the United Nations in order to implement their demands, as the agreement stipulated that grains be transported through three main ports: (Chornomorsk, Odyssia, and the port of Yuzhny), and two of these ports are located within Ukrainian territory. Therefore, this withdrawal means that Russia will move towards intensifying its efforts to Towards its control over these ports, especially since they were previously bombed during the entry into force of the agreement on October 29, 2022, and what reinforces this problem is that the Russian decision was followed by sending a letter to the International Maritime Organization meaning that withdrawing from the agreement means canceling the guarantee of safety of navigation that had been issued by the Russian side.
Expanding the scope of war to include naval operations, Russia has announced the conduct of new military exercises, which means that the withdrawal will have serious consequences in the escalation of the Russian-Ukrainian conflict. This was stated by Rosemary DiCarlo, Deputy Secretary-General of the United Nations for Political Affairs, on July 21, 2023, when she said: “ Threats against civilian ships in the Black Sea are unacceptable,” especially since the military exercises carried out by Russia included how to detain ships.
Fifth: Alternative options for Ukraine
Through the grain agreement, Ukraine was able to export about 50% of wheat and 15% of other crops. Therefore, the Russian decision to withdraw from the agreement means affecting the Ukrainian grain export, at a time when it needs money as a result of the conflict with Russia. Therefore, there are options that explain the Ukrainian position and how to deal with this crisis:
- The cautious confrontation with Russia in the Black Sea: This means that Ukraine may move towards escalating the confrontation with Russia in the Black Sea, if Ukrainian ships are exposed to any possible Russian attack. At the same time, any potential Ukrainian escalation with Russia as a result of this agreement requires Western support, especially from the United States and NATO, which makes the United States and NATO not want to escalate the confrontation with Russia in the Black Sea, because they believe that Russia has left the It is open to the possibility of returning to the agreement again once its demands are met.
- Searching for alternative paths to export: Ukrainian President Volodymyr Zelensky announced his country’s readiness to maintain its grain exports even without Russia. However, for this trend to be achieved on the ground, it needs major American and European support to confront the problems that may result from this. path; Ukraine wants to obtain American and European financial support estimated at $500 million to cover any damages or expenses incurred by ships moving through the Black Sea and partly to ship more grain through the Danube River in Europe.
The group of river ports, which are among the alternative lines for exporting wheat (Rennie and Ust-Donaysk), are located along the Romanian border, and they represented important logistical centers during the beginnings of the Russian-Ukrainian war. These ports also witnessed the export of (12.3) million tons of goods during the first five months for the year 2023. However, this alternative route will not be at the same level as the Black Sea route for several reasons:
- Speed of water movement in the Danube River
- The small size of ships that can carry cargo compared to ships that transit ports across the Black Sea
- The difficulty of relying on transportation via railways for economic connectivity with European countries, as the Ukrainian railway network has a gauge of 1520 mm, while the Eastern European Union countries use a gauge of 1435 mm, which means that it is impossible to operate trains from one network to another without interruption.
Sixth, the expected international movements to contain the situation:
Given the seriousness of the Russian decision to withdraw from the initiative globally, all expectations are towards interventions from many countries that have strong relations with the Russians, such as Turkey, China, and even many European countries. It is expected that Turkey will try to intervene on the line of mediation with Russia if this problem takes this path, as Turkey is considered one of the parties that participated in this agreement, and was able to achieve a strong political gain, as under this agreement it received wheat coming from Ukraine and re-exported it or sold it to the World Food Program and distributed it as food aid. The Black Sea Agreement allowed the World Food Program to deliver (481) thousand tons of wheat to Somalia, Yemen, Ethiopia and Afghanistan, which eased local price pressures.
In connection, the line of negotiations with Russia may take a direction based on attempts to provide some gains to Russia, which may include:
– Trying to convince Russia that returning to the agreement will bring economic benefits to it by convincing it that returning will allow it to restore its banks to the international payment system (SWIFT), which is a proposal presented by the United Nations and the European Union.
– Restarting the ammonia production line in the Odessa region, which is also desired by both the United States and the European Union, given that Russia had previously demanded the resumption of operation of the (Togliatti – Odessa) pipeline, which was suspended at the end of February 2022, as part of Implementation of the grain deal. However, there are security concerns that make Ukraine unwilling to allow this line to operate again.
Therefore, the United States, China, and the European Union will have a role in trying to persuade Russia to return to the agreement again, which means that there is a chance that there will be a new agreement, and the United Nations has pledged to search for ways to persuade Russia to retract this decision.
In conclusion, European countries and the United States view the Russian decision with great concern, especially since it came before the Russian-African summit was held in St. Petersburg at the end of last month, and Russia’s attempt to use the food card in the game of managing its relations with African countries, especially poor countries, especially since Ukraine will not It alone will be able to transport grains to these countries via the Black Sea or other alternative methods. Also, this withdrawal may put many other agricultural crops at risk, and will lead to an increase in transportation costs if we rely on other alternative methods. In addition, this decision means lifting guarantees on the passage of ships in the northern part of the Black Sea, thus threatening maritime navigation, and thus further military escalation of the confrontation between Russia and Ukraine, while the possibility of a collision with the West in the Black Sea region remains high.
