Expected to reduce food scarcity
The implications of the “grain deal” between Russia and Ukraine, mediated by Turkey and the United Nations
Grain production has been piled up in Ukrainian warehouses because of the war. Archive
The signing of the agreement paved the way for the start of grain exports.
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Ukraine, Russia, Turkey and the United Nations signed an agreement in Istanbul on July 22 to resume Ukrainian grain exports through the Black Sea.
The agreement would allow the release of Ukrainian grain suspended due to war conditions, and the European Union, simultaneously, announced the easing of restrictions on the export of Russian grain and fertilizer.
The United States welcomed the agreement, as State Department spokesman Ned Price said: "We welcome the announcement of this agreement in principle, but what concerns us now is to hold Russia responsible for implementing this agreement, and to allow Ukrainian grain to reach global markets."
The most important terms of the agreement, which was reached under the auspices of Turkey and the United Nations, are as follows:
First: the release of Ukrainian grain, as the agreement allows the export of between 20 and 25 million tons of grains besieged in Ukraine.
The agreement will be valid for a period of "120 days", which is the period required to extract about 25 million tons of grain accumulated in Ukrainian silos, while the date of the new harvest season approaches.
It is worth noting that Russia and Ukraine together provide about 30% of world wheat exports.
Second: The establishment of safe corridors. The agreement provides for the establishment of “safe corridors” that can allow the passage of commercial ships in the Black Sea, and Moscow and Kiev pledged not to “attack them.”
Negotiators abandoned the removal of mines planted by the Ukrainians to protect their coasts in the Black Sea, on the grounds that the process of removing them would take a long time, and "Ukrainian pilots" would open the way for cargo ships in the territorial waters.
Third: Inspection of Ukrainian ships. It was agreed that inspections of ships departing from or heading to Ukraine would be carried out in Istanbul, with the aim of responding to Russian demands, which want guarantees that cargo ships will not bring weapons to the Ukrainians.
Fourth: Exemption of Russian exports from sanctions, and the European Union announced, on July 22, i.e. on the day of the signing of the same agreement, that it had decided to exempt commercial transactions related to agricultural products and oil transport, which take place between third-party countries and some entities owned by Russia, from sanctions, with the aim of exempting Russian exports from sanctions. Avoiding any potential negative consequences for food and energy security around the world, which is a reversal of previous Western sanctions, and is an integral part of the grain agreement signed with Ukraine.
The movement of Russian ships has been disrupted because European insurance companies have warned against providing their services to Russian companies, which means that the new European measures will facilitate the export of food grains and agricultural fertilizers from Russian ports.
The European Union has also removed the sanctions imposed on some Russian banks from restrictions on food export transactions, such as Sofcom Bank, Novikum Bank, Otkrititi, VEB, Promsviaz Bank and Banque Russia and Sberbank.
West retreat
It is noted that Western countries have eased some sanctions on Russia to release Ukrainian grain, as previously mentioned, which could be due to several reasons.
First: the collapse of American alternatives, as the United States sought to get Ukrainian wheat out by land through Romania and Poland, to be transported through the ports of Poland or Romania to various countries of the world, but it faced problems in this context, as the quantities that could be exported by land were Limited, Ukrainian railways are not qualified to transport large quantities of wheat.
Also, Ukraine's railways are different from their European counterparts, which has made it practically difficult to export wheat by land.
On the other hand, with the approach of the grain harvest season in Ukraine, the new grain production would not have found a new place to store it, especially if the grain stored in Ukrainian warehouses had not been exported abroad.
On the other hand, US President Joe Biden announced in mid-June that the West intends to build silos on the Ukrainian border to facilitate the export of grain stuck in the Black Sea ports, but this solution would have taken time, and would not enable Ukraine to store its new crop in the silos, Which was almost completely full, as it contained 20 million tons of wheat.
Second: Avoiding the collapse of Western hegemony. It is noted that Russia sought to exploit the global food crisis, in addition to the rise in temperatures, and the damage to agricultural production this season in a number of countries, and sought to export grain to friendly countries through a new system of financial transactions based on local currencies. With the aim of avoiding third-party sanctions imposed by Western countries.
In view of the failure of Western countries, led by the United States, to provide alternatives to grain from Russia and Ukraine, as well as the failure of their plans to extract Ukrainian grain without reaching an agreement with Russia, the various countries had no choice but to respond with Russia to adopt a bilateral system of trade exchange away from The use of the bank transfer system (SWIFT), which meant the collapse of the West's hegemony over the global financial system, and thus the decline in the effectiveness of Western sanctions.
Therefore, the Western retreat from some of the sanctions imposed on Russia was aimed at avoiding a greater danger, which is the tendency of the various countries to deal directly with Russia, thus offering alternatives to the global financial system dominated by the West.
On the other hand, the Western third-party sanctions have faced challenges, especially with the trend of both China and India to increase their exports of oil and gas from Moscow, despite Western warnings to impose sanctions against the three parties that enter into financial transactions with Moscow to undermine Western sanctions against it.
Third: The failure of the Western media attack.
Western countries accused Moscow of being responsible for the global food crisis, accusations that Russia rejected, stressing that Western countries are responsible for the current crisis. Gas, one of the most important inputs to the agricultural fertilizer industry, will affect food imports.
On the other hand, Russia blamed the United States for global inflation, as it confirmed that Washington printed money used in global reserves, which increased global inflation and exacerbated food prices, meaning that the West, not Russia's war, is responsible for the global crisis.
In fact, the countries of the world do not care much about holding Russia or the West responsible for the food crisis, but rather were keen to find alternatives at reasonable prices, and given that most of the world’s countries have interests with Russia, or Western countries, Washington and European countries have not succeeded in pushing it To adopt sharp positions against Russia, or identify with Western sanctions against Russia.
Other fields
It is noted that the review of Western sanctions against Russia will not be limited to food only, but will extend to other areas.
Officials from the Group of Seven countries have proposed the idea of setting a special pricing for Russian oil sales, which represents a retreat from Western attempts to remove Russian oil from the markets, realizing the absence of alternatives that could compensate for the huge Russian production.
But on the other hand, this policy is not reasonable, as Russia may tend to reduce the quantities of exported oil in response to other countries' attempt to price its oil, causing a greater rise in international oil prices, and then Moscow will increase the revenues of energy exports.
According to the Center for Research on Energy and Clean Air, Moscow's energy revenues during the first 100 days of the war grew by 60% year on year to reach about $97 billion, and this comes amidst Brent crude prices exceeding more than $100 a barrel since late February.
In addition, Washington extended the exemption of financial transactions related to Russian energy purchases with “Sberbank”, “VTB Bank” and “Alpha Bank”, in addition to other Russian entities from sanctions until December 5, which means that the United States realizes For the losses sustained by Western sanctions against Moscow.
In conclusion, it can be said that Western sanctions against Russia may witness a decline in the coming period, due to their catastrophic repercussions on the global economy, the absence of alternatives so far, as well as the West's failure to implement sanctions against the third party, and Washington's fears of Russia finding alternatives to settle financial transactions With the countries of the world, beyond the Western financial system, and undermining the American hegemony over the global financial system.
With the approach of the grain harvest season in Ukraine, the new grain production would not have found a new place to store it, especially if the grain stored in Ukrainian warehouses had not been exported abroad.
b Of the world wheat exports provided by Russia and Ukraine.
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