Putin proposes free grain for Africa As Russia establishes grain trade terms

On Monday, Russia spelled out the requirements for agreeing to another extension of the Black Sea grain deal, and President Vladimir Putin threatened to deliver free food to African countries if those terms were not satisfied.

The agreement, which allows for the safe transport of grain from Ukrainian and Russian Black Sea ports, was renewed on Saturday for 60 days – half the original term – after Moscow stated that any extension beyond May 18 would be contingent on the easing of some Western sanctions.

Russia’s foreign ministry, in a statement posted on its website on Monday, said Moscow had decided to limit the extension of the deal to 60 days over what it called “a lack of progress… on normalisation of domestic agricultural exports”.

It said the deal’s renewal in May would depend on certain conditions, including the restoration of access to the SWIFT financial messaging system for Russian state-owned agriculture-focused bank Rosselkhozbank, a resumption of farm machinery supplies, and the unblocking of foreign assets and accounts held by Russian agricultural companies.

The grain deal, brokered last July by the United Nations and Turkey, aims to combat a global food crisis partly fuelled by the Russia-Ukraine conflict. Both Russia and Ukraine are major grain exporters.

Ukraine, along with Turkey and the United Nations, had wanted to extend the deal for 120 days.

Speaking at a Russia-Africa parliamentary conference in Moscow on Monday, Putin said grain exports under the Black Sea deal had unfairly prioritised “well-fed European markets” rather than African countries, and that the renewal of the deal on Russia’s terms was in the continent’s interests.

Putin said that if the deal were not renewed, Moscow could supply free grain to “especially needy African countries”, without elaborating. So far, exports under the grain deal have been transported under commercial agreements.

Though the main destinations for grain shipped under the deal have been China, Spain and Turkey, African countries have benefited indirectly as increased supply has helped drive down global grain prices.

In its statement, Russia’s foreign ministry said neither Turkey nor Ukraine had raised formal objections to the shortened renewal period for the grain deal.

A senior Ukrainian official told Reuters that Kyiv had objected to Moscow’s insistence on a 60-day extension.

Western nations have imposed harsh sanctions on Russia in response to its activities in Ukraine. While Russian food and fertilizer exports are not sanctioned, Moscow claims that limitations in the payment, logistical, and insurance industries are impeding such shipments.

Source | Bloomberg