According to Putin, Russia can withdraw from the grain deal and transfer grain to poor countries for free

IRussian President Vladimir Putin said the Russian Federation is considering withdrawing from the grain deal. Putin highlighted that much of the Ukrainian grain that is exported does not arrive in the countries for which it was intended, but is instead sold to European Union countries, generating considerable revenue for Ukraine in terms of foreign exchange.

The Russian agriculture minister highlighted that much of the exported Ukrainian wheat ends up in European Union countries, rather than in Africa. As a result, African countries do not receive the food they need, while European countries receive a disproportionately high share. According to data collected during the autumn, only two of the 80 ships carrying grain from Ukrainian ports were destined for poor countries. This is a serious fact, so much so that the Russian Agriculture Minister Patrushev declared that these European countries are “ordinary colonizers” who have continued to implement colonial practices for centuries.

Furthermore, the second part of the grain agreement which provides for the removal of sanctions from the export of Russia’s grain and fertilizer supplies, was not respected by Western countries: According to Reuters, Russia claims that although food and fertilizer exports are not subject to Western sanctions, restrictions on payments, logistics and insurance are making exports difficult. Ukrainian Deputy Foreign Minister Serhii Vershynin said Russia is not satisfied with how the memorandum is being implemented. As a result, the wheat agreement is unlikely to be extended in July unless there are substantial changes.

Putin has argued that Russia has benefited little from the deal and that the only solution is to exit the agreement. Furthermore, highlighted that the trade route for wheat it is often used to attack Russian ships. In the end, only 3% of exported Ukrainian wheat reaches the poorest countries in the world, while the majority ends up in European Union countries.

(above: video of a Ukrainian drone attack on a Russian ship monitoring the grain route)

The Russian leader stated that in case of withdrawal from the grain agreement with Ukraine, Russia will however continue to send its wheat free of charge to the poorest countries in the world. Putin has made it clear that Russia will replace the “three percent” of Ukrainian wheat with its own wheat donated to struggling nations. However, such actions will not be discussed with the Western community, but with the rulers of African countries at a future meeting. Furthermore, Putin said that the grain deal between Ukraine and the Russian Federation is unfair and that Russia may decide to cease participation in it.

So, after six months of the agreement, the agreement is not respected by the Western side and no significant progress has been made. Furthermore, the cost of wheat around the world is falling thanks to the ‘wheat deal’, with prices falling by 2.3% in April 2021. The grain deal between Ukraine and Russia was brokered by Turkey and the United Nations and has been extended three times. The transaction is divided into two parts, ensuring the safe transportation of Ukrainian grain and the lifting of Russian sanctions on agricultural products and mineral fertilizers (but as already mentioned this last part is not respected).

Ultimately, the wheat agreement did not lead to the desired results. Most of the Ukrainian grain exported – as already mentioned – ends up in European countries rather than in Africa, where hunger is widespread. Furthermore, there is also an internal problem within Europe, where Ukrainian wheat is not subjected to controls and duties, which harms Polish farmers and those countries that traditionally produce wheat.

If RUSSIA withdraws from the agreement, it could negatively affect the Ukrainian economy, which partly depends on grain exports. Interestingly, grain deals also impact food prices around the world. In fact, the decrease in wheat prices leads to a decrease in the prices of other foods, such as bread, pasta and baked goods. When this happens, the positive effect on the economy of families living in difficult conditions is evident.