- by James Waterhouse
- BBC Ukraine correspondent, Odessa
Ukrainian grain agreement. July 22, 2022-July 17, 2023.
A short life with its flaws but the only diplomatic light in the darkness of the Russian invasion.
It allowed Ukraine to export its grain to the world through the Black Sea.
A third less than normal, but still 33 million tons. However, his health has deteriorated in recent months.
Russia was accused of blocking the course with sea barriers and lengthy inspections, and the deal eventually capitulated.
Last week saw Moscow’s official withdrawal. Then Russia launched a wave of missile strikes on the ports it had promised to leave on its own.
One of the sites destroyed was a grain factory belonging to one of Ukraine’s largest producers, Kernel. Officials say more than 60,000 tons of grain were destroyed last week.
“We stopped our exports for the first two or three months of the war,” explains Yevgeny Osipov, CEO of Kernel.
“Oil and grain prices are up 50%, and you can see the same thing happening now.”
While global grain supplies appear stable for the time being, global markets saw grain prices rise 8% in a single day after Russia withdrew – the biggest daily rise since its full invasion of Ukraine in February last year.
The Kremlin agreed not to target port infrastructure at three locations in the region, but that diplomatic shield no longer exists.
With the ports damaged, no agreed passage through the Black Sea and Russia controlling most of the coast, Osipov believes Ukraine’s grain export capacity will drop another 50%.
“It’s a huge challenge for our farmers because they will have to sell their produce 20% below cost,” says Osipov, who predicts that in the future there will be fewer people working on less land.
The death of the grain deal extends beyond the ports of Odessa. Mayor Gennady Trukhanov believes that Moscow just wants to show that nothing will be exported without them, and he is right.
He says: “The most terrible thing is that in order to achieve their goal, they attacked innocent people.”
You don’t have much doubt about the scale of Ukrainian grain production when you’re standing 40 meters above a silo in the central Poltava region.
The factory we are in can hold 120,000 tons. That’s about a third full, and although Ukraine can’t export through the Black Sea, it will still be full.
The site is surrounded by endless farming area.
This is a country that cannot suddenly stop producing grain. It has to go somewhere — or at least that’s the hope.
“We think it’s essential to harvest as much grain as possible,” says Yulia, a lab technician at Kernel, as she pours the samples into a tube.
Before the grain deal was born, tens of millions of people from some of the world’s poorest countries were at risk of starvation because of Ukraine’s inability to export it.
Twelve months later, that threat has returned.
“Maybe the Russians don’t understand what hunger is,” Yulia says. People are starving, there are plenty of supplies, but they can’t get them for no reason. »
Moscow has previously threatened to walk away, essentially saying there are too many restrictions on its agricultural products.
He also wants to give a major bank access to a global payment system, lift restrictions on Russian fertilizer companies, and give his ships full access to insurance and foreign ports.
Russian President Vladimir Putin has now turned these complaints into demands. However, if it is achieved, it will require Western sanctions relief, which is hard to imagine.
Last July, the Kremlin seemed eager to be “part of the solution” to a food crisis caused directly by the invasion of Ukraine.
Frustration on the battlefield seems to have changed this.
Although there is no pulse, Turkey – one of the main brokers of the grain agreement with the United Nations – still hopes to revive it.
So, assuming the initiative is already dead, is there a clear heir? An alternative solution to Ukraine for export?
Roads and railways ran through neighboring countries such as Romania and Poland, but there were times when Ukrainian grain flooded their markets and drove prices down, to the dismay of farmers.
The Danube is also developing as a route through central Europe, with two million tonnes of grain transiting in the past 12 months, up from 600,000 a year ago.
However, both are only scratching the surface of what Ukraine hopes to change and are logistically much more expensive.
During her recent visit, USAID Administrator Samantha Power asked if Ukraine’s status as “Europe’s breadbasket” was a thing of the past.
She had just announced a nearly $1 billion package for Ukraine, which included the modernization of agriculture.
His response was “We are doing what we can, but there is no substitute for peace.”
Additional reporting by Akriti Thapar, Anastasia Levchenko and Anna Tsippa