August 15, 2022

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Live updates: Russia and Ukraine reach a grain deal

Live updates: Russia and Ukraine reach a grain deal

attributed to him…Nicole Tong for The New York Times

BRUSSELS – After three months of intense talks, Ukraine and Russia have reached an agreement, with the United Nations and Turkey, that will allow both countries to take grain and other foodstuffs as well as fertilizers out of the world.

Ukraine and Russia are among the world’s largest grain and fertilizer exporters, particularly in the African and Middle Eastern markets. When Russia invaded Ukraine, this trade was practically suspended, mainly due to the Russian naval dominance of the Black Sea which effectively blockaded Ukraine’s ports.

The results have been devastating: historically high grain prices have led to inflation, and food shortages in parts of the world that need it most, including Somalia and its neighbors in the Horn of Africa.

There were many influencing parts to this deal, and officials didn’t believe it was possible until just last week, not least because the war is going on and trust between the two sides is very low.

Here’s what to know about what the problem is, how it can be addressed after this hack, and what the risks are.

Why was the Ukrainian grain stuck inside the country?

After Russia invaded Ukraine on February 24, it deployed warships along the Black Sea coast of Ukraine. Ukraine mined those waters to deter a Russian naval attack. This means that the ports used to export Ukrainian grain have been closed for commercial shipping. Russia also stole grain stocks, mined grain fields so they could not be harvested, and even destroyed grain storage facilities.

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attributed to him…Tyler Hicks/The New York Times

How will the process work?

Ukrainian captains will drive ships full of grain out of the ports of Odessa, Yuzhny and Chornomorsk.

Using safe, non-mined lanes, they would lead the ships to Turkish ports, where they would be unloaded, after which the grain would be shipped to buyers around the world.

Returning ships will be checked by a joint team of Turkish, UN, Ukrainian and Russian officials to ensure they are empty, and not carrying weapons to Ukraine – a key Russian demand.

A joint command center with officials from all four sides will be immediately set up in Istanbul to monitor all movements of the fleets.

The parties agreed that the ships themselves and the port facilities used for their operations would be protected from hostilities.

The operation will begin in the coming weeks and is expected to quickly begin shipping 5 million tons of grain per month. At this rate, given that 2.5 million tons of grain is already transported by land and river to Ukraine’s friendly neighbors, stocks of nearly 20 million tons should be cleared within three to four months. This will free up space in storage facilities for the new harvest, which has already started in Ukraine.

What are the risks?

A broad cease-fire has not been negotiated, and peace talks are moribund, so ships will travel through a war zone. Attacks near ships or at the ports where operations are conducted could undermine the agreement. Another risk is dishonesty or disagreement between the various inspectors and joint command officials.

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The role of the United Nations and Turkey is to mediate such disagreements on the spot and to monitor and implement the agreement. The agreement is in effect for 120 days, and the United Nations hopes it will be renewed, to ease severely disrupted global food supplies.

attributed to him…Sergey Popock/AFP – Getty Images

Will this immediately solve world hunger and lower global food prices?

No, world hunger is an ongoing problem due to poor food distribution and price gouging, and it hits some parts of the world year after year. They are often exacerbated by conflicts and affected by climate change. However, the war in Ukraine, which produces a large share of the world’s wheat, put a huge burden on the grain distribution networks, driving up prices and fueling hunger.

Officials say this agreement has the potential to increase the flow of wheat into Somalia within weeks, avert a mass famine, and should lead to a gradual decline in world grain prices. But given how fragile the agreement is due to the ongoing war, it is unlikely that grain markets will return to normal immediately.

What is there for Russia?

Russia is a major exporter of grain and fertilizer in its own right, and the agreement is supposed to make it easier for them to sell these goods on the world market.

The Kremlin has repeatedly claimed that its stockpile cannot be exported due to economic sanctions imposed by the United States and the European Union.

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The measures do not actually affect those goods. However, in practice, private shipping companies, insurance companies, banks and other companies have been very reluctant to help Russia export grain and fertilizer, either because they feared they would run counter to sanctions or because they were concerned that doing business with Russia might harm them. reputation.

Reassuring these companies that they will not be penalized if they help Russian exports, the European Union on Thursday issued a legal clarification on its sanctions saying that various banks and other companies involved in the grain trade were not in fact banned.

Armed with similar guarantees from the United States, the United Nations said it had held talks with the private sector, and that trade from Russia – particularly the Russian port of Novorossiysk – should accelerate.