Is Russia’s withdrawal from the Black Sea Grain initiative a mere bargaining game?

Is Russia’s withdrawal from the Black Sea Grain initiative a mere bargaining game?

Russia’s decision on Monday to withdraw from the Black Sea Grain Initiative seems to be aimed more at punishing Ukraine and its western-backers than creating a world food crisis.

It comes at a time when NATO, in its summit last week, decided to step up all efforts to support Ukraine to win the ongoing war.

Russia’s withdrawal is also an attempt to bargain for assured export of Russian food grains and to get its agriculture bank reinstated in the SWIFT system of financial transactions. Some Russian banks were banned from using this payment system in 2022, as part of sanctions against the country.

Russia has launched a series of air strikes on the Ukrainian port cities of Odessa and Mykolaiv over the past two days in response to a sea drone attack by Kyiv on a Crimean bridge under Russian control.

But the termination of the deal has raised widespread concerns about food prices rising and putting further pressure on the global food supply.

The Black Sea Grain Initiative allowed Ukraine to safely export grain by sea, bypassing the Russian blockade of its Black Sea ports and navigating safe passage through Turkey’s Bosphorus Strait to reach global markets.

The incoming ships were inspected by Russian, Ukrainian and Turkish officials before they arrived in Ukraine to make sure they were not carrying weapons into the country.

Russia’s withdrawal comes with claims that the second agreement—the Memorandum of Understanding between the Russian Federation and the Secretariat of the United Nations on promoting Russian food products and fertilisers to the world markets, was never properly implemented.

Russia said the MoU was signed to ensure global food security, reducing the threat of hunger and helping Asian, African and Latin American countries in need. But its food grains were not being allowed to be “adequately exported.” Kremlin spokesperson Dmitry Peskov said, “As soon as the Russian part is completed, the Russian side will return to the implementation of this deal immediately.”

Russian President Vladimir Putin said the main objective of the deal was to supply grain to countries in need. But this has not been done and obstacles were put before Russian food exports. According to Russia, its goods are lying in European ports and not being lifted deliberately.

The Black Sea Grain Initiative deal was reached in July last 2022. Besides Ukrainian exports, it was also to allow Russia to ship food and fertiliser to the global market, and was to be extended every four months. It was renewed three times, but the last two renewals were for only two months each as Russia complained that obstacles were being put on its food and fertiliser exports.

The United Nations and Turkey brokered the deal to allow grain to be shipped from Ukraine despite the ongoing war. Much of the exported grain was meant to be shipped to impoverished countries in Africa, the Middle East and Asia.

Meanwhile, Russia’s decision has evoked strong criticism from the US, Ukraine, and NATO countries “Russia’s decision will worsen food insecurity and harm millions of vulnerable people around the world,’’ US National Security Council spokesperson, Adam Hodge said.

Anthony Blinken, the US Secretary of State, accused Russia of using the grain deal as a weapon.

Ukraine and Russia are major global suppliers of wheat, barley, sunflower oil and other food products. Though termination of the deal by Russia could cause food prices to climb, it was not clear how adverse it will be for food supply worldwide.

Russia’s news agency TASS quoted Italian newspaper Corriere della Sera to argue that the suspension of the grain deal will not lead to a food crisis or increase in grain prices because of sufficient supplies from Russia. It said grain exports from Russia are close to an all-time high.

According to the newspaper, Russia supplies a large amount of grain to the market at reduced prices, which contributes to a decrease in global prices, so the rise in food prices that was observed a year ago has ended.

India is among the countries whose wheat production has increased. India’s wheat production is estimated to set a new record of 112.74 million tonnes in the 2022-23 crop year (July-June).

The overall food grain output is also likely to be a record 33,053 million tonnes, the Agriculture Ministry said in May this year.

However, in a report issued last week the United Nations’ World Food Programme said that about 783 million people around the world do not have enough to eat with more than 345 million facing “high levels” of food insecurity and 40 million living in or near famine conditions.

Russia argued that contrary to the “purported humanitarian objectives”,

Ukrainian food exports were being used purely on a commercial basis to serve Kyiv and its western backers’ interests.

It said that of the 32.8 million tonnes that were exported, more than 70 percent or 26.3 million tonnes went to countries with “high and higher than average income,” and EU members.

Poor countries like Ethiopia, Yemen, Afghanistan, Sudan, Yemen, and Somalia received less than 3 percent or 9,22,092 tonnes.

Russia is hosting a summit with Africa on economic and humanitarian development between July 26 and 27. It is also engaged in talks with Turkey to find alternative arrangements for supplying grains to the world’s “neediest” countries.

Despite the US-led western countries’ attempt to isolate Russia, most poor and developing countries in Asia, Africa, and Latin America have remained neutral on the Ukraine war.

Moscow will ensure it does nothing to jeopardise that sentiment and the tacit support of the Global South.