The diplomatic war over Ukrainian grain exports heats up - Forexsail

The diplomatic war over Ukrainian grain exports heats up - Forexsail

Think of it as the war beyond the war. Russia’s Feb. 24 invasion of Ukraine and ongoing military offensives to capture more of its neighbor’s territory have caused plenty of destruction in their own right 

Tens of thousands of civilians are feared dead, millions more are displaced and there has been billions of dollars in damage to Ukraine’s cities and critical infrastructure.

But the crisis has had dramatic ripple effects around the world, too. The cumulative effect of Russian attacks on Ukraine and blockade of its Black Sea ports, as well as Western sanctions on Russian exports, has led to skyrocketing prices in places far from the conflict zone.
 

In poorer countries in Asia and Africa, the cost of basic staples like wheat and cooking oil have shot up and created new strains for societies that can least afford them. In the Horn of Africa alone, up to 20 million people may go hungry this year amid food shortages and an extended drought.

Now, foreign governments are struggling for options to release Ukraine’s immense supply of agricultural products, particularly wheat. Ukrainian officials say some 20 million tons of grain are trapped within the country, with Russia both blockading ports that remain in Ukrainian hands and allegedly bombing Ukrainian facilities that store grain.
 

Through various diplomatic channels, Ukrainian officials are exploring the possibility of moving shipment of grain via train to faraway ports on the Baltic Sea, as well as neighboring Romania.

But significant logistical problems remain, including whether these ports have the capacity to effectively accommodate the increased burdens. Cold War-era construction may also present an obstacle.
 

“Ukraine, Russia, Lithuania and other former members of the Soviet Union use the Russian standard of railway gauge,” explained the Wall Street Journal. “Poland, Romania and most of the rest of Europe use a narrower gauge. To move grain across those borders, either the undercarriages of the railcars must be changed or the cargo shifted to new trains.”
 

Turkey’s awkward role in the Russia-Ukraine war

On Monday, reports in Russian state media pointed to an emerging Russo-Turkish plan to ease the blockade of the major Black Sea port of Odesa.

Turkish ships would help demine the waters off the city’s coast and guarantee safe passage for Ukrainian cargo vessels ferrying the grain through the Bosporus and toward ports in the Mediterranean. Russian Foreign Minister Sergei Lavrov is expected in Ankara on Wednesday for talks with his Turkish counterparts.
 

Ukrainian officials, though, expressed grave reservations about the mooted plan. “By commenting in advance on reaching the deal, Russia is seeking to shift responsibility to Ukraine” for disrupting supplies

Taras Kachka, Ukraine’s deputy economy minister, told Bloomberg News. “But the fact remains that the food crisis has been artificially created by Russia and Russia alone.”
 

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On Twitter, Ukrainian Foreign Minister Dmytro Kuleba warned of the Kremlin using this opening to force through an invasion of Odesa. In recent weeks, politicians and diplomats from the Baltic states and Poland — countries most wary of Russia’s designs — similarly cautioned against entering into dialogue with Russian President Vladimir Putin over easing the blockade.
 

Russian officials have sought to place the focus on their own thwarted exports of food and fertilizer, thanks to sweeping Western sanctions placed on the country’s economy since its invasion of Ukraine. U.S. and Ukrainian officials accuse Moscow of using its blockade as a form of blackmail to win a degree of sanctions relief.

U.S. officials have also cited apparent evidence of Russian ships ferrying “stolen” Ukrainian grain from ports under its control, including from the Crimean peninsula, annexed by Moscow in 2014.
 

“It’s hard to view the Russian offers in good faith considering how they are actively and intentionally destroying food products in Ukraine and exacerbating global food insecurity,” a U.S. official told Politico.


Outside the West, Putin is less isolated than you might think

But governments elsewhere are more receptive to the Russian position. On Friday, Senegalese President Macky Sall, who is also chair of the African Union, met with Putin in the Black Sea city of Sochi. There, Sall lamented how African countries, “although they are far from the theater, are victims of this crisis on an economic level.”

Between 2018 and 2020, Africa imported some 44 percent of its wheat from Russia and Ukraine. Since the recent disruptions, wheat prices have risen some 45 percent, according to the African Development Bank.
 

With a Putin at his side, Sall urged relief for both Ukraine and the country that chose to attack it. “The fact that this crisis brought the cessation of exports from Ukraine, but also from Russia because of sanctions, we have found ourselves in between these two,” Sall told reporters.
 

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“It’s of absolute necessity that [governments in the West] help to facilitate the export of Ukrainian grains, but also that Russia is able to export fertilizers, food products, but mainly cereals.” Source: MSN

 

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