15 March, 2023
Black Sea Grain Initiative Renewal: Five Points
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The Black Sea Grain Initiative, initiated in the summer of 2022 as a way to secure Ukrainian Black Sea grain exports in spite of Russia’s aggression, is set for renewal on 18 March. This will be the second time the Initiative is to be prolonged as the July 2022 agreements stipulate a renewable 120-day term. What is the background and what are the stakes? SCEEUS analyst Charlotta Rodhe explains.
The Black Sea Grain Initiative, a set of agreements between the United Nations, Türkiye, Ukraine and Russia, has been largely successful in enabling the seaborne export of Ukrainian grain. Through the Initiative, over 24 million tonnes of Ukrainian agrocommodities have been delivered or are currently in transit. This is both an important source of income for Ukraine and an important share of the global trade in grains. It should not be forgotten, however, that in recent months about half of Ukraine’s grain exports has been through the largely land-based EU-Ukraine solidarity corridors. Nonetheless, all eyes are on the Black Sea trade, as this remains a substantially cheaper export route.
From the outset, Russia has insisted on connecting the Initiative to a separate agreement with the UN to “facilitate normalization of Russian food and fertilizer exports”. This has provided an opportunity for the problematization of Western sanctions under the auspices of the UN. In this context, it is important to note that Western sanctions do not prevent the export of food or fertilizer from Russia to third countries. As a result of pressure, EU sanctions even include specific exemptions aimed at making this abundantly clear. It should also be noted that Russian agroproduct exports have, in fact, not been substantially affected by sanctions. Instead, they are clearly on the rise, and Russia’s own export controls on fertilizer have contributed to tight markets and higher prices.
Similarly, it should not be overlooked that the Initiative is an attempt to resolve a problem that Russia has itself created. Its aggression against Ukraine has included attacks on infrastructure, blockades of ports and the destruction of agricultural assets. The way to truly ensure free flowing exports of both Ukrainian and Russian agro products would be for Russia to end its aggression. In that sense, the very basis of the Black Sea Grain Initiative is fundamentally flawed, giving Russia a role in the solution of a problem that it continues to create. The inclusion of Russia in the so-called Joint Coordination Centre (JCC) in Istanbul, the inspection facility created by the Initiative, is also a concession that gives Russia undeserved leverage over Ukraine’s exports. Russia has used this on several occasions to stall and delay inspections at the JCC. In this context, the numerous and credible reports of Russia selling grain stolen from Ukrainian farmers should also be taken into account.
Negotiations on continuation of the Initiative are currently ongoing. Ukraine has prepared well: in February, the Verkhovna Rada (Ukraine’s parliament) established a special insurance facility for ships entering Ukrainian ports under the Initiative. This is significant, since the November experience of renewal showed that exports could continue even in the absence of Russian agreement on prolongation and without Russian participation in joint inspections as long as insurance remained valid for the shipping companies. This was an important lesson for Ukraine and the West.
As part of the negotiations, Ukraine has called for the inclusion of an additional port in the Initiative, and for extension of the period of the Initiative from the currently stipulated 120 days to one full year. This would remove some of Russia’s recurring leverage in terms of renewal negotiations and provide much-needed predictability for global grain markets, which would benefit both regular consumers and humanitarian actors. Russia’s initial position, by contrast, was that it would not agree to any extension at all without serious concessions on sanctions. (It is unclear what these might entail, since there are no sanctions on grains or agroproducts). However, it is now signalling that it would agree to a shorter extension of 60 days. That would make the next renewal date just days after the 14 May presidential elections in Türkiye, making Turkish political continuity a factor in the calculation.
Will the renewal happen? While nothing is certain, it is at least fairly likely that exports will continue, with or without Russia’s participation in the Initiative. This is based on the lessons from the previous renewal, when it became clear that Russia’s explicit agreement was less important than having insurance in place. Russia also has limited incentives to take action that would make Moscow look like a spoiler, which would go against its ambitions to bring the Global South closer into its orbit by portraying itself as a benefactor amid the global food security crisis, while also negatively affecting other actors important to Moscow. Türkiye is a key importer of both Russian and Ukrainian grain. It also wants to be seen as a mediator between Russia and Ukraine, and the Black Sea Grain Initiative is its current flagship. In addition, China is currently the country that buys the largest share of the produce exported through the Initiative (over 20%) and thus has an interest in continued flows. Upsetting these powers would not play to Russia’s advantage. Thus, on the whole, Russia’s bargaining position is at its peak right now, before the renewal, but set to diminish more and more. This is as good an argument as any for the West to keep a cool head and avoid making even symbolic concessions on sanctions or elsewhere.