Signs that Russia is preparing to ditch grain deal

22-06-2023 | |
Photo: Canva
Photo: Canva

Russian top government officials claimed that the Black Sea grain deal would not be extended under the current circumstances, though Moscow plans to ensure that the poorer countries would not suffer from food scarcity following its termination.

Russian President’s spokesperson Dmitry Peskov told local newspaper Izvestia that the Black Sea grain deal “de facto has no chances” since the part of the agreement designed to facilitate the export of Russian agricultural products has never been executed.

In May 2023, Moscow reluctantly agreed to extend the grain deal for 2 months until July 17.

Grain deal hits stumbling block

Valentina Matvienko, head of the Council of Federation, the upper chamber of the Russian Parliament, told the state press during St. Petersburg Economic Forum that the grain deal drove into a stumbling block since the key Russian demands have yet to be met. For example, the Russian agricultural bank Rosselhozbank has not been reconnected to the SWIFT network, and Western countries still block the export of critical agricultural technologies to Russia.

“It is not possible to upgrade this deal. And under these conditions, I believe, it is also impossible to extend it because the limit of our patience and desire to implement it has been exhausted,” Matvienko said, adding that the Russian authorities plan to run a series of consultation with the expert community and with delegations of African countries to discuss the future food supply.

Russian Foreign Affairs Minister Sergey Lavrov said during the St. Petersburg Forum that extending the grain deal would be senseless, again parroting the claim that Western countries have consistently ignored Russian demands. He stated that the grain deal doesn’t work.

Circumventing sanctions

On the other hand, Russian Deputy Prime Minister Victoria Abramchenko said that Russia gets no benefits from participating in the grain deal but will honour taken obligations. She has not said anything about the future of the agreement but said that Russian exporters largely managed to overcome the sanctions pressure and this year expects to export 60 million tonnes of grain.

Since the beginning of the current season, Russia exported 52 million tonnes of grain, 42% higher compared with the previous year, the Russian Agricultural Ministry estimated.

Russian business is looking for ways to circumvent sanctions, including, switching to transactions in local currencies, Vitaly Sergeychuyk, spokesperson for the Russian state bank VTB said. In the coming years, Russia has the potential to nearly double food export, as its key trade partners, including China and India, are expected to increase imports from Russia.

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