Erdoğan says that putin agrees to the Grain Agreement. What can russia get in return?
And how crucial is the continuation of the “corridor” for Ukraine?
President of Turkey Recep Erdoğan has stated that he has reached an agreement with russian president vladimir putin regarding the extension of the Grain Agreement. Erdoğan's statement during the press conference was widely covered by international media.
However, the original quote was less definitive. Erdoğan stated that he and the russian president share a common view on extending the Grain Agreement. He confirmed his hope for the continuation of the agreement after July 17 as a result of the efforts of the UN and Turkey, as well as during negotiations with the russian president during his visit to Turkey in August.
Mind explains, whether the operation of the Black Sea Grain Corridor can be considered resolved after July 17.
Has russia officially confirmed the extension of the Grain Agreement? No, it has not. dmitry peskov, putin's press secretary, emphasised that there is currently no official position on this matter.
In a recent interview, the prospects for the grain initiative did not appear very promising. putin specifically mentioned that none of the russian side's requirements regarding logistics, insurance, and the movement of funds related to agricultural product payments had been fulfilled. "Nothing, I want to emphasise, absolutely nothing has been done. It's all a one-sided game," said the leader of the aggressor state. He stated that russia will "think about how to proceed" in the remaining days.
"One option could be a scenario where promises are fulfilled first, and then our participation," he said.
If russia agrees to the extension of the “corridor”, what can it get in return? It is almost official – the easing of sanctions against the russian agricultural bank.
On July 11, a week before the formal expiration of the Grain Agreement, UN Secretary-General António Guterres sent a letter to vladimir putin proposing to maintain the operation of the Black Sea initiative and expressed readiness to connect the russian bank to SWIFT.
"The objective is to remove hurdles affecting financial transactions through the russian agricultural bank, a major concern expressed by the russian federation, and simultaneously allow for the continued flow of Ukrainian grain through the Black Sea," explained Stéphane Dujarric, the spokesperson for the UN Secretary-General.
How important is the continuation of the Grain Agreement? It is critically important, as maritime exports currently remain the only viable option, despite the active development of other channels for the Ukrainian agricultural products' distribution.
According to the data from the State Statistics Service and the State Customs Service, the export of major grain crops from Ukraine in 2022/23 reached over 49 million tonnes (data as of June 28), compared to 48.4 million tonnes in the previous season. The absolute majority of shipments consisted of maize, with 29 million tonnes exported, nearly a quarter more than in the 2021/22 marketing year.
In 2022, the share of agri-food products in Ukraine's total exports increased to 53% from 41% in 2021.
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