The first direct talks between Russia and Ukraine since last March may soon culminate in an agreement to lift the Russian blockade of the Black Sea port of Odesa, enabling Ukraine to resume exports of grain.
The talks began on July 13th in Istanbul, under the aegis of the United Nations and Turkey.
Together, Russia and Ukraine account for between 30 and 40 per cent of the world’s wheat, maize and sunflower crops, and 90 per cent of sunflower oil, says Richard Rozwadowski, an independent expert on agriculture in Ukraine.
In normal times, Ukraine exports up to five million tonnes of grain monthly. But Russia is blocking Ukraine’s main Black Sea port of Odesa, by firing on ships and, according to the Ukrainians, laying mines in the water. Russia says it is Ukraine that has laid anti-ship mines.
Ukraine has met a fraction of its contractual obligations by using road and rail, as well as canals on the Danube, says Alla Stoyanova, director of agricultural policy for the Odesa region: 200,000 tonnes in March, 1.06 million tonnes in April, 1.43 million tonnes in May and 2.2 million tonnes in June.
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“Markets over-reacted at the beginning of the war, and a few western farmers did very well selling grain futures,” Rozwadowski says. Prices nearly doubled between July 2021 and May of this year, when they reached $400 per tonne, but have now fallen to around $330 per tonne.
Up to 25 million tonnes of grain have been blocked in Ukraine, leading to fears of famine in the developing world. “An awful lot of people in Africa are going to starve to death because they [Ukraine] are the sole supplier of a number of African countries,” US president Joe Biden said in May.
A report published by five UN agencies on July 6th said that close to 10 per cent of the world’s population are undernourished, and 57.9 per cent of the population of Africa suffer from food insecurity.
Stoynova sports decals of sheaves of wheat over a map of Ukraine on her long fingernails. The map, she notes, includes the Crimean peninsula, which Russia seized in 2014.
“By blocking ports, Russia is committing an act of aggression against all the countries who cannot receive our grain,” Stoynova says. “They are blackmailing the world and that is a crime.”
Rozwadowski says there is no immediate shortage of grain but high prices risk creating instability. “A drought in southern Russia and Ukraine was one of the main factors that started the Arab Spring. It’s a classic scenario. Rising food costs spark a revolt in the developing world and dictators crack down.”
[ ‘Putin thought Odesa would welcome him with bread and salt’Opens in new window ]
Russian forces in the southern city of Melitopol reportedly looted several million euro worth of equipment from the John Deere dealership there in May. A flat-bed military truck emblazoned with the letter Z, a symbol of support for the Russian invasion, helped ferry 27 pieces of equipment to Chechnya. Chechen soldiers stole two John Deere harvesters worth over €300,000 each. The harvesters are equipped with GPS systems which made it possible to block their software remotely.
There have been numerous reports of Russian troops stealing grain from Ukrainian silos, and setting fire to fields of ripening wheat. Turkey’s foreign minister promised to investigate reports that stolen grain has been unloaded in Turkish ports. Ukraine’s interior ministry said on Wednesday that 200 hectares of wheat had burned in the previous 24 hours, and that Russian forces fired artillery shells to prevent fire-fighters from extinguishing the blazes.
About 22 per cent of Ukraine’s territory is now occupied by Russian forces. Farmers in the occupied south have not been allowed to cross Russian lines to sell their crops, and refuse to sell at a loss in Crimea. Ukrainian television has shown mountains of cabbage, cucumbers, tomatoes and watermelons left to rot by despairing farmers.
Ukraine’s ability to export the blocked grain by rail has been hampered by the fact that its trains run on wide-gauge tracks, while EU countries use narrow gauge. Only three wide-gauge tracks run into neighbouring Poland and Hungary, Rozwadowski says.
New crossings have been opened on Ukraine’s borders with Moldova and Poland, to facilitate grain exports by lorry, Stoyanova says. Since Ukraine retook Snake Island from Russia on July 4th, the Russian navy can no longer threaten ships travelling up canals in the estuary of the Danube to load Ukrainian grain at Izmail. About 140 ships had queued to use the passage. Stoyanova says the opening of a second canal will end the bottleneck quickly.
Storing Ukraine’s excess, blocked grain is also a problem. “The silos are all full. Ukraine has nowhere to put this year’s harvest,” says Rozwadowski. “Agbags”, which he describes as “plastic bags like massive preservatives” are one solution, 20 times cheaper than building new silos. Giant rings “which link together like Lego kits” are another. Grain elevators are used to drop grain inside the perimeter of the rings, which are then covered with tents.
The UN Food and Agriculture Organisation is exploring such solutions. So is Usaid, which is about to announce substantial funds in support of Ukrainian agriculture. Candidacy for EU membership makes Ukraine eligible for subsidies.
If Russia and Ukraine can agree on lifting the blockade, one wonders if there is hope for negotiations on other issues. The talks in Istanbul have been fraught with mutual distrust. Ukraine insists that ships be escorted, to protect them from the Russians, and wants assurances that if Odesa’s port is demined, Russia will not use it as an invasion route. Russia demands inspections to ensure that Ukraine does not bring in weapons on ships travelling to Odesa to load grain.
Ukrainians have little confidence that Russia will respect any agreement it signs, but see an accord on lifting the blockade as a win-win situation. “It will help our economy, and world hunger, if we can export our grain,” Stoyanova says. “And if Russia violates a UN-sponsored agreement, it will prove once and for all that Russia is not worthy to be a UN member.”
