THE ORIGINAL DEAL (2022)

Explainer: Why the Black Sea Grain Deal Is Vital for Global Food Security

November 02, 2022 6:23 PM

• By Agence France-Presse

KYIV, UKRAINE — 

A landmark deal to allow grain exports from Ukraine, which was back on track Wednesday after being briefly suspended, has played a crucial role in easing a global food crisis sparked by the Russian invasion of Ukraine.

Brokered by the United Nations and Turkey and signed by Moscow and Kyiv on July 22, the agreement established a protected sea corridor to allow grain shipments to resume for the first time since the fighting began in February

Here is what we know about the deal, known as the Black Sea Grain Initiative:

Why was it needed?

When Russian troops attacked in late February, Moscow imposed a blockade on Ukraine's Black Sea ports, halting all agricultural exports from one of the world's breadbaskets.

The move left 20 million metric tons of grain stranded in Ukraine's ports, causing food prices to surge worldwide.

Before the war, up to 90% of Ukraine's wheat, corn and sunflower exports were transported by sea, mostly from Odesa, with many developing countries relying heavily on Kyiv for grain.

Agricultural commodity prices were high before the war because of the post-COVID-19 economic recovery, but the conflict pushed the price of grains such as wheat and corn to levels unsustainable for countries dependent on their import, such as Egypt, Lebanon and Tunisia.

What does the deal cover?

The deal ensures the safe export of grain, foodstuffs and fertilizers, including ammonia, from three Black Sea ports in southwestern Ukraine: Odesa, Chornomorsk and Pivdennyi.

The first grain ship to leave under the U.N.-backed deal set sail on August 1.

According to U.N. figures as of November 1, a total of 9.7 million metric tons of grain and other agricultural products have been transported in the first three months of the initiative, the vast majority involving wheat and corn.

Valid for 120 days, the agreement is up for renewal on November 19 in a process that can be done automatically without further negotiations.

The U.N. says extending the deal is crucial for global food security and is pushing for it to be renewed for one year.

Although the initiative is working well, shipments are about 40-50% lower than what they were before Russia's invasion, the U.N. says.

How does it work?

According to the U.N.'s website, the agreement establishes a safe corridor between the three Ukrainian ports and an area in Turkish waters where the vessels are inspected before being allowed to continue their journey.

To monitor the agreement, a joint command and control center was set up in Istanbul to oversee smooth operations and resolve disputes.

Known as the Joint Coordination Center (JCC), the JCC has four teams of eight inspectors — two each from Russia, Ukraine, Turkey and the U.N.

These teams inspect outbound vessels carrying grain at the Turkish inspection area to ensure all merchandise is approved.

The teams also examine empty ships returning to Ukraine to ensure they are not carrying any weapons or other unauthorized goods or people.

WHY RUSSIA PULLED OUT OF THE 2022 DEAL

The deal was signed by Russia, Turkey, Ukraine and the UN in July 2022 to grant a humanitarian maritime corridor for ships exporting food and fertilizers from Ukrainian ports. As Moscow has repeatedly noted, the second part of the deal, the three-year Russia-UN memorandum, has not been implemented.

The Black Sea Grain Deal will stop operating from July 18 after Russia withdrew its guarantees for the safety of navigation and curtails the maritime humanitarian corridor in the northwestern waters of the Black Sea, the Russian Foreign Ministry said.

The ministry noted that the Russian side objects to its further extension and formally informed the Turkish and Ukrainian sides about it, as well as notifying the UN secretariat. 

"Without Russia's participation, the Black Sea Initiative ceases to function from July 18," the statement said.

Clarifying the reasons for this decision, the ministry said that none of the systemic tasks envisioned in the Russia-UN memorandum had been accomplished:

The Russian Agricultural Bank has not been reconnected to the SWIFT system.

"The feverish, last-minute proposal of the UN secretary-general on some options with access to SWIFT for a 'subsidiary' or affiliated with our bank is practically unrealizable and unviable - to our knowledge, this is also recognized in the European Union," the ministry said.

The import of spare parts and equipment for agricultural products and fertilizers into Russia is prohibited as "dual-use" goods.

Foreign accounts of domestic agricultural companies have been frozen, despite the fact that Western sanctions allegedly do not apply to food and fertilizers. Partially unblocked funds 'migrated' into the pockets of the same Westerners to repay loans and pay for gratuitous deliveries of our fertilizers," the Russian Foreign Ministry recalled.

The Togliatti-Odessa ammonia pipeline has not been restored, which was stipulated in both parts of the grain deal.

The ministry noted that "at first they tried to bargain additional benefits for the expansion of the Black Sea Initiative (inclusion of new ports, diversification of cargo nomenclature and increased inspections) under its restart, and then part of the ammonia pipeline was destroyed."

"In this context of blatant sabotage in the implementation of the Istanbul agreements, the extension of the Black Sea Initiative, which has not justified its humanitarian purpose, loses its meaning," the Russian Foreign Ministry concluded.

The body added that Russia will be ready to consider restoring its participation in the grain deal only after reaching concrete results and not just promises from the West.

https://en.sputniknews.africa/20230717/why-did-russia-terminate-the-black-sea-grain-deal-foreign-ministry-explains-1060593090.html?

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THE NEW DEAL (2025)

What is the essence of the Black Sea deal? Answers to the main questions

Peskov named the conditions for the resumption of the Russian Black Sea initiative

Russia has agreed with the United States to comply with the so-called Black Sea Initiative, which ensures the safety of navigation in the Black Sea. It is essentially a renewal of the grain deal that was mediated by Turkey and the United Nations in 2022-2023. The agreement will begin to be implemented after a number of sanctions against the Russian agricultural sector are lifted. What this deal is is in the Izvestia article.

What have Russia and the United States agreed on?

• On March 24, Saudi Arabia hosted a meeting of expert groups from Russia and the United States, at which the Russian side was represented by Grigory Karasin, Head of the Federation Council's International Affairs Committee, and Sergey Beseda, Adviser to the FSB Director. The central topic of the meeting was the resumption of the Black Sea initiative.

• The following day, the parties announced the agreements reached. The Kremlin reported that Russia and the United States agreed to ensure the safety of navigation in the Black Sea, not to use force and not to allow the use of commercial vessels for military purposes, for which appropriate control measures will be organized through the inspection of such vessels.

• In response, the United States has committed to help restore access to the global market for Russian exports of agricultural products and fertilizers, reduce the cost of shipping insurance, and expand access to ports and payment systems for commercial transactions.

Under what conditions will the deal be resumed?

• The White House confirmed what was said in the Kremlin following the talks, but did not specify under what conditions the Black Sea initiative would enter into force. The first of these is the lifting of sanctions against Rosselkhoznadzor and other banks involved in international trade in food and fertilizers, their connection to the SWIFT financial information transfer system and the opening of necessary correspondent accounts.

• It also requires the lifting of restrictions on trade finance operations, on the work of insurance companies with food and fertilizer shipments, as well as sanctions against manufacturing and exporting companies. It is especially noted that food means not only grain crops, but also fish products.

• In order to resume the Black Sea Initiative, it is necessary to lift restrictions on ship service in ports, lift sanctions on merchant vessels flying the Russian flag, and lift the ban on the supply of agricultural machinery and other goods necessary for food and fertilizer production to Russia.

• According to Karasin, these conditions were announced to the American side during the negotiations, and the United States "reacted calmly to this." However, specific deadlines for connecting Russian banks to SWIFT were not discussed, as well as methods for monitoring the safety of navigation in the Black Sea.

https://en.iz.ru/en/1861688/2025-03-29/what-essence-black-sea-deal-answers-main-questions

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Russian fertilizers occupy a significant share in the global market due to the scale of production and reliability of supplies. Mikhail Belyaev, a financial analyst and Candidate of Economic Sciences, told Izvestia on March 10.

Earlier, on March 9, RIA Novosti reported from an analysis of data from the American statistical service that companies from the United States at the beginning of the year increased purchases of Russian fertilizers by 20% year—on-year to $85.5 million.

"We produce fertilizers in large quantities. And all three types: nitrogen, potassium, and phosphorus. But especially we are talking about nitrogen fertilizers, which are produced from gas. We actually occupy up to 20-25% of the global fertilizer market, largely due to the fact that we extract gas, and fertilizers are made from gas," Belyaev explained.

According to him, Russia differs from other exporters in that it always strictly fulfills its obligations, especially on foreign trade supplies.

"Modern agriculture, whether in the United States or any other country, cannot do without fertilizers. The land has been depleted by years of exploitation, and agriculture simply cannot function without fertilizers," the expert added.

The expert also drew attention to the fact that, despite the sanctions imposed by the United States against Russia, the supply of fertilizers and other materials continues.

"The United States does not impose sanctions that could harm them. It is important to understand this," he said.

According to the expert, the growth of Russian fertilizer supplies is possible due to the involvement of new importing countries that value the availability, low cost and reliability of the Russian product.

"Western Europe, for example, used to produce fertilizers, but now it is extremely difficult for them to compete with us due to the energy crisis. We have established ourselves as extremely reliable suppliers, and this is our main advantage," Belyaev summed up.

The European Commission approved duties on a number of agricultural products from Russia and Belarus and some nitrogen fertilizers on January 28. At the same time, exports of Russian agricultural products and fertilizers to third countries will remain unchanged.

Maxim Chirkov, Associate Professor of the Department of Economic Policy and Economic Measurements at GUU, told Izvestia on January 29 that the introduction of duties on imports of agricultural products and nitrogen fertilizers from the Russian Federation to the European Union would not have serious consequences for the Russian economy. According to him, these restrictions are illogical and will negatively affect the European part of this industry.

Переведено сервисом «Яндекс Переводчик»

https://en.iz.ru/en/1851605/2025-03-10/expert-spoke-about-advantages-fertilizers-russian-federation-world-market

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