The high-level four-party meeting (Russia, Türkiye, Ukraine plus the UN) in Istanbul has still not reached an agreement on extension for the Black Sea Initiative on the export of Ukrainian grain, which expires on May 18.
On May 11, delegations from the parties to the Black Sea grain deal agreed to continue negotiating at the technical level but failed to make a decision on extending the deal itself, according to a statement by the Turkish Defense Ministry, published on its website.
Reports emerging from the meeting indicated that Russian delegates confirmed the exports of ammonia were supposed to begin simultaneously with the export of Ukrainian grain under both Istanbul agreements and without any preliminary conditions. Emphasizing the interlinked character of the package agreements, the Russian participants noted the absence of progress in implementing the Russia-UN Memorandum on normalizing domestic agricultural exports.
The report further indicated that the Russian side pointed to five systemic problems (bank payments, transport logistics and insurance, parts supplies, unblocking “frozen” assets and the ammonia pipeline). These obstacles continue preventing Russian agricultural exports from reaching global markets.
The Russian delegates noted that commercial exports of Ukrainian grain (70 percent of which is fodder corn and feeder grain) mostly to the advanced countries are not of primary importance for ensuring global food security and reducing the threat of famine. To reach these goals, it is more important to normalize exports of Russian fertilizers and grain (70 percent of which is wheat), which are being complicated by Western unilateral blocking sanctions.
Our monitoring shows that Russian Deputy Foreign Minister Sergei Vershinin took part in a high-level, four-sided meeting (involving Russia, Turkey, Ukraine and the UN) as part of a Russian interagency delegation in Istanbul on May 10-11.
“The discussion centered on reviewing the implementation of the package agreements concluded in Istanbul on July 22, 2022, with an emphasis placed on the Black Sea Initiative concerning exports of Ukrainian food products, which expires on May 18. There was a detailed exchange of opinions on current problems in the work of the Joint Coordination Center and on UN Secretary-General Antonio Guterres’s proposals on unblocking the Togliatti-Odessa ammonia pipeline,” the Foreign Ministry’s report said.
“The Russian side reiterated that ammonia exports should start simultaneously with exports of Ukrainian grain, as stipulated by both Istanbul agreements, and without any preconditions,” it said.
“In addition, emphasizing the ‘packaged’ and interconnected nature of the agreements, it was noted that there had been no progress in implementing the Russia-UN memorandum on normalizing Russian agricultural exports, including with regard to the five ‘systemic’ problems (bank payments, transport logistics and insurance, deliveries of spare parts, unblocking frozen assets, and the ammonia pipeline), which continue to obstruct deliveries of Russian agricultural products to global markets,” it said.
Russian presidential press secretary Dmitry Peskov told journalists that contacts regarding the future of the grain deal would continue. On the prospects for extending the grain deal, Peskov also said that “there is nothing to report at this point, as the work is continuing. Contacts are continuing and they will continue further. But there is nothing to report just yet.”
“A conversation between the two presidents, Russian and Turkish leaders, would not be enough to make the deal happen. The second part of the deal needs to be implemented for this deal to happen,” he said.
Experts have also shown concern about the developments regarding the deal. Resolving technical issues is one of the stumbling blocks in the current talks but without doing so, it will be impossible to proceed to the main agenda of extending the grain agreement, thinks Dmitry Ofitserov-Belsky, a Researcher at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAN).
“Any agreement should provide for the parameters of rejecting the deal but they weren’t there in the initial version of the grain agreement. It is not clear how vessels heading to Ukrainian ports are to be inspected. This clause is important in order to exclude the possibility of Western arms being supplied to Ukraine in this way,” the expert said.
According to him, the initial agreement also does not spell out what sanctions could be imposed on those who violate the grain deal. “There are no instructions as to what to do with those vessels that abuse the agreement and how to dispose of prohibited cargos,” he added.
Another complicated issue is the lifting of sanctions imposed on the Russian Agricultural Bank or the inclusion of a foreign intermediary bank for servicing Russia’s grain exports, says Alexey Zubets, Director of the Institute of Social and Economic Research at the Financial University under the Russian Government.
“Russia has set its sights on expanding agricultural exports. Yet, due to economic restrictions, Russian agribusiness is bumping up against serious difficulties in international markets, and so renewing the grain deal will become possible if Moscow can manage to push this banking clause through in the text of the document,” he noted.
The Russian export part of the grain deal is encountering pushback from Western countries. The United States and European countries are trying to squeeze Russia out of the global food market and Western sanctions allow them to do so, at least in part.
Under these conditions, it is believed that the talks will develop in line with one of three scenarios. Either there will be a final rejection of the deal, which is unlikely. The second option is that a new agreement covering all of the technical details will be concluded by May 17. Finally, the third scenario is an extension of the existing agreement for another 30 days to allow for further discussion.
Western powers have imposed tough sanctions on Russia over its Feb. 24, 2022, due to ‘special military operation’ in the neighboring Ukraine. The UN-brokered Black Sea grain deal allows the safe wartime export of grain from several Ukrainian Black Sea ports to different parts of the world. Under the deal – agreed in July 2022 – also allows the parties to reach an agreement on operational priorities. The Black Sea initiative expires on May 18.
