Russia warns West: we may work around the Black Sea grain deal

By Guy Faulconbridge

MOSCOW (Reuters) – Russia warned the West on Friday that unless obstacles to its exports of grain and fertilisers were removed, then Ukraine would have to export grain over land and Moscow would work outside the UN-brokered landmark grain export deal.

The Black Sea grain deal is an attempt by the United Nations to ease a food crisis that predated the Russian invasion of Ukraine, but was made worse by the most deadly war in Europe since World War Two.

The deal, first signed by Russia, Ukraine, Turkey and the UN in July last year and twice extended, allows for the export of food and fertiliser, including ammonia from Ukraine’s Black Sea ports of Odesa, Chornomorsk, Yuzhny/Pivdennyi.

While the West has not placed sanctions on Russia’s food and fertiliser exports, Moscow says they are compromised by obstacles – such as insurance and payment hindrances – that it says must be removed.

Russian Foreign Minister Sergei Lavrov said that if the West did not want to be honest about what UN Secretary-General António Guterres had sought to do with the deal, then Ukraine would have to use land and river routes to export.

If the West continued to refuse to remove the obstacles to Russian exports, Moscow would work around the grain deal, Lavrov said beside his Turkish counterpart at a news conference in Ankara.

“If they do not have the desire to honestly approach what Mr. Guterres proposed and so persistently promoted, well, let them continue to ship the relevant products from Ukraine by land, by rail and by rivers,” Lavrov said.

“And we will work, if necessary, outside the framework of this initiative. We have the opportunity to do this with Turkey, with Qatar – the presidents discussed relevant plans,” Lavrov said.

Russia and Ukraine are two of the most important producers of agricultural commodities in the world, and major players in the wheat, barley, maize, rapeseed, rapeseed oil, sunflower seed and sunflower oil markets. Russia is also dominant on the fertiliser market.

Russia’s agriculture ministry on Friday set its grain harvest plan for 2023 at 120 million tonnes, Interfax reported citing a draft declaration.

Since its signing, the 120-day grain deal has been extended twice, once in November and a second time in March, though Russia said the March extension was only for 60 days.

Russia has repeatedly said that any further extension of the grain deal will require a host of its demands to be fulfilled by the West including the reconnection of Russian Agricultural Bank (Rosselkhozbank) to the SWIFT payment system.

Other demands include a resumption in supplies of agricultural machinery and parts, a lifting on restrictions on insurance and reinsurance, access to ports, the resumption of the Togliatti-Odesa ammonia pipeline and the unblocking of assets and accounts of Russian companies involved in food and fertiliser exports.