“MANY MAY DIE” FOLLOWING END OF BLACK SEA GRAIN DEAL, UN WARNS

Sat 22 July 2023:

A spike in grain prices since Russia quit a deal allowing the safe Black Sea export of Ukraine grain “potentially threatens hunger and worse for millions of people,” the United Nations’ Aid chief told the Security Council on Friday, Reuters reports.

“Some will go hungry, some will starve, many may die as a result of these decisions,” Martin Griffiths told the 15-member Council, adding that some 362 million people in 69 countries were in need of humanitarian aid.

Russia quit the Black Sea grain deal on Monday, saying that demands to improve its own food and fertiliser exports had not been met, and that not enough Ukrainian grain had reached the poorest countries.

US wheat futures in Chicago rose over 6 per cent this week and, on Wednesday, had their biggest daily gain since Russia invaded Ukraine in February 2022. They pared some of those gains on Friday, in part, due to hopes Russia may resume talks on the deal.

The Black Sea grain deal was brokered a year ago by the United Nations and Turkiye to combat a global food crisis worsened by Russia’s invasion. Ukraine and Russia are both leading grain exporters.

The UN has long argued that the Black Sea deal was a commercial operation and it had benefited poor states by helping lower food prices more than 23 per cent globally since March last year. The World Food Programme also shipped 725,000 tonnes of grain to Afghanistan, Djibouti, Ethiopia, Kenya, Somalia, Sudan and Yemen.

But Mikhail Khan, a macroeconomist who Russia asked to brief the Security Council, said the poorest countries had received just 3 per cent of the grain shipped by Ukraine, in line with UN data.

The impact of the grain deal in terms of provisions of Ukrainian grain to global markets is “essentially not very significant,” he said.

Russia is negotiating exports of food to countries most in need following its exit from the deal, but has not yet signed any contracts, Deputy Foreign Minister, Sergei Vershinin, said in Moscow on Friday.

EU still open to help UN

Russia pounded Ukrainian food export facilities for a fourth day in a row on Friday and practiced seizing ships in the Black Sea. Moscow has described the attacks as revenge for a Ukrainian strike on Russia’s bridge to Crimea.

“The new wave of attacks on Ukrainian ports risks having far-reaching impacts on global food security,” UN Political Affairs chief, Rosemary DiCarlo, told the Security Council.

Turkish President Tayyip Erdogan hopes to meet with Russian President, Vladimir Putin, next month and said those talks could lead to the restoration of the Black Sea grain deal, calling on Western countries on Friday to consider Russia’s demands.

US Ambassador to the UN, Linda Thomas-Greenfield, said Russia had no legitimate reasons for quitting the deal. Russia’s grain and fertiliser exports are not subject to Western sanctions, but Moscow said restrictions on payments, logistics and insurance have been a barrier to shipments.

“They would have you believe that sanctions have blocked their exports. That couldn’t be further from the truth,” Thomas-Greenfield said. “Russia is simply using the Black Sea as blackmail … it’s holding humanity hostage.”

Russia’s Deputy UN Ambassador, Dmitry Polyanskiy, said Moscow does not object to the Black Sea deal – “especially given its significance per the global food market for many states” – and was ready to return if its list of demands was met.

He said Russia had harvested 156 million tons of grain over the past year, and exported 60 million tonnes. But he complained Russia operated at a loss due to lower grain prices and higher costs for cargo, foreign transactions, imports of agricultural production machinery and spare parts.

A key demand by Moscow is the reconnection of Russia’s Agricultural Bank, Rosselkhozbank, to the SWIFT international payments system. It was cut off by the European Union in June 2022.

Before Russia withdrew from the Black Sea deal on Monday, the UN had “brokered a concrete proposal” with the European Commission to connect a Rosselkhozbank subsidiary to SWIFT.

“We remain open to explore solutions with the UN that would contribute to the resumption of the grain deal,” EU envoy to the UN, Olof Skoog told the Council.