In a region fraught with tensions, the Black Sea grain corridor agreement has become the epicenter of a geopolitical standoff, with Russia’s withdrawal in July triggering a complex web of negotiations and security concerns. Despite international efforts and mediation attempts, the accord’s reinstatement remains elusive, posing a significant threat to global food security.
Despite international appeals and intense mediation by Turkey and the United Nations, Russia has not granted its approval for a return to the grain corridor agreement. Additionally, Russia’s airstrikes on the Ukrainian Black Sea and Danube ports following its withdrawal from the deal have added to the urgency of the situation. Expectations were high for a resolution during President Recep Tayyip Erdogan’s meeting with Russian President Vladimir Putin in Sochi on September 4. However, Putin, speaking after the summit, emphasized unfulfilled promises from the grain deal and underscored the need to address obstacles hindering Russian food and fertilizer exports before recommitting to the agreement.
RUSSIA’S AFRICAN INITIATIVE
Just two days after the Sochi summit, Moscow declared its collaboration with Turkey to export grain to African nations. While this partnership, backed financially by Qatar, outlines the shipment of one million tons of grain to Turkey for processing and eventual export to Africa, precise technical details remain undisclosed. Turkey expressed optimism about the African initiative but remains primarily focused on reviving the Black Sea Grain Corridor agreement, which facilitated the transport of 33 million tons of Ukrainian grain to global markets in a year. This issue will be a central point of discussion as President Erdogan attends the UN General Assembly meetings in New York. UN Secretary-General Antonio Guterres has also announced his intention to meet with Turkish, Ukrainian, and Russian leaders during the assembly to rekindle negotiations.
TEMPORARY CORRIDOR MEASURE FROM KIEV
Kyiv has declared a ‘humanitarian corridor’ for grain shipments to the western coastline of the Black Sea near Romania and Bulgaria, despite Russia threatening to treat all ships as potential military targets after withdrawing from the deal. In September, two cargo vessels successfully navigated this new route to the Ukrainian port of Chornomorsk to pick up 20,000 tons of wheat. Nevertheless, security concerns cast doubt on the sustainability of this alternative corridor.
RISK FACTORY LOOMING OVER BLACK GRAIN SUPPLY
While Russian and Ukrainian grain continues to flow into the global market, leading to falling prices and dispelling immediate fears of a global famine, experts caution that the situation in the Black Sea region remains fragile. Andrey Sizov, Managing Director of SovEcon, emphasized the escalating risk due to the lack of progress in the grain deal. He highlighted Russia’s intensified attacks on Danube River ports and the potential closure of the Kerch Strait, a vital conduit for Russian grain exports, as alarming developments.
Sizov further warned of the growing intensity of attacks on Ukrainian ports, which, although not yet significantly affecting grain shipments, have led to increased freight costs. The potential for vessel seizures by Russian ships and retaliatory actions by Ukraine pose additional threats. Unlike Ukraine, Russia lacks alternative routes for grain exports, raising the specter of price explosions and market volatility if the situation deteriorates further. “In the event of serious problems with exports from the region, we will likely see an explosion in prices caused by a reduction in the supply of grain and the mass closing out of short positions by speculative funds. Indeed, the world could be just one drone attack away from such a scenario becoming reality,” he warns.