UN Chief Writes to Putin in Bid to Keep Grain Deal Alive

UN Chief Writes to Putin in Bid to Keep Grain Deal Alive

U.N. Secretary-General Antonio Guterres has sent a letter to Russian President Vladimir Putin, outlining a proposal aimed at satisfying a Russian demand that threatens to shut down the key Black Sea Grain Initiative.

“The secretary-general remains engaged with all relevant parties on this issue and expresses his willingness to further engage on his proposal with the Russian Federation,” Guterres’ spokesman Stephane Dujarric told reporters Wednesday.

Dujarric declined to go into details about the proposal, saying “we are in very delicate times.” 

The initiative, which allows the export of Ukrainian grain from ports Russia blocked during its invasion of Ukraine last year, is due for renewal by July 18. Moscow has said repeatedly during the lead-up to previous extension deadlines that it is not benefiting enough under the initiative and has sent similar signals recently.

A parallel memorandum of understanding between Moscow and the United Nations has sought to remove obstacles to the export of Russian grain and fertilizer. While food and fertilizer are not sanctioned by the West, efforts have been made to ease concerns of anxious banks, insurers, shippers and other private sector actors about doing business with Russia. 

One of Russia’s main demands has been for its agriculture bank to be reinstated in the international Swift system of financial transactions.

U.N. trade chief Rebeca Grynspan, who has led the U.N. negotiations with Moscow on the memorandum of understanding, told reporters Wednesday that the U.N. has been able to secure “alternatives” to Swift within the Western sanctions framework, to help the Russian Agriculture Bank expedite its work.

“But it’s true that this is one of the challenges that has not yet fully happened,” she said. “We have not fully found the solution for the Russian Agriculture Bank.”

But she said the U.N.’s proposal could be of significant help for what the bank wants to achieve. She emphasized that it would apply only to food and fertilizer and not to the Russian Agriculture Bank’s other operations.

Since the Black Sea Grain Initiative was signed in Istanbul on July 22, 2022, nearly 33 million metric tons of grain and other food stuffs have been exported to global markets, helping to calm food prices, which spiked at the start of Russia’s full-scale invasion of Ukraine in February last year.

Experts say food prices would certainly spike again if Moscow does not renew the deal.

“How much will be the duration of that spike will depend a lot on how markets will respond to that,” Maximo Torero, Chief Economist of Food and Agriculture Organization (FAO) told reporters.

His remarks came at the launch of a global food security report, which found that between 691 and 783 million people faced hunger in 2022, an increase of 122 million people compared to 2019, before the COVID-19 pandemic. 

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