Moscow Suspends Its Participation In Black Sea Grain Export Deal, Kremlin: Russia's Concerned Part Has Not Been Implemented

Kremlin spokesman Dmitry Peskov. (Wikimedia Commons/Presidential Executive Office of Russia)

The Kremlin announced the suspension of Russia's participation in the Grain export deal through Luat Hitam, saying its requirements to extend the deal had not been fulfilled.

The deal, brokered by the United Nations and Turkey in July, aims to ease the global food crisis by allowing Ukrainian grains held back due to the Russia-Ukraine war, to be exported safely.

The deal has been extended several times, but will end on Monday. Russia has said for months that the requirement for an extension of the agreement has not been fulfilled.

"In fact, the Black Sea agreement is no longer in effect today," Kremlin spokesman Dmitry Peskov told reporters.

"Unfortunately, part of the Black Sea agreement involving Russia has not been implemented so far, so the effect has been stopped," Peskov continued.

Moscow is known to have long complained that there are still obstacles to the export of its grains and fertilizers, although this was not directly approved by the West, filing a series of demands that it said had not been met.

"As soon as the Russian part of this agreement is fulfilled, the Russian side will return to the implementation of this agreement soon," Peskov said.

Peskov added that this decision was not related to the attack that took place on the Crimea bridge which he called a terrorist act and blamed Ukraine.

"This is a completely unrelated event. Even before the terrorist attack, President Putin had announced this position," Peskov said.

Earlier, the last ship to transport grains left Ukraine under a deal on Sunday.

Invasion of Russia in February 2022 and the blockade of Ukraine's Black Sea port made global grain prices soar. Ukraine and Russia are among the world's major seed exporters

Nearly 33 million metric tons of corn, wheat, and other grains have been exported by Ukraine under the agreement.

Russia is threatening to leave the deal, saying its demands to increase exports of its own grains and fertilizers have not been met. Russia also complained about the insufficient grains that reached poor countries.

Meanwhile, the United Nations believes the deal has benefited these countries, by helping to lower food prices by more than 20 percent globally.

The United Nations said the World Food Program had obtained 80 percent of its wheat so far in 2023 from Ukraine, up from 50 percent in 2021 and 2022.

The World Food Program has delivered about 725,000 metric tons of Ukrainian wheat to Afghanistan, Sudan, Djibouti, Ethiopia, Kenya, Somalia and Yemen to fight hunger.

Furthermore, he said, the agreement has so far supplied seeds to 45 countries on three continents, 46 percent to Asia, 40 percent to Western Europe, 12 percent to Africa and 1 percent to Eastern Europe.

Russia has previously agreed to an extension of the Black Sea deal three times in the past year, but has also suspended its participation in late October in response to drone attacks on its fleet in Crimea.

To convince Russia to agree to the Black Sea deal, a three-year deal was also made in July 2022, in which UN officials agreed to help Russia export its food and fertilizer to overseas markets.

While Russian food and fertilizer exports are not subject to Western sanctions imposed following the Russian invasion, Moscow says payment restrictions, logistics and insurance have been a barrier to shipments.

Russia's main request is for the Russian Agricultural Bank (Rosselkhozbank) to be reconnected to the SWIFT international payment system. The Bank was cut off from SWIFT by the European Union in June 2022, due to an invasion of Ukraine.

UN Secretary-General Antonio Guterres made his last attempt last Tuesday to convince Russian President Vladimir Putin to extend the Black Sea seed deal for several months, in exchange for the EU to connect Rosselkhozbank's subsidiary to SWIFT for grain and fertilizer transactions, sources said.

A UN spokesman said Secretary General Guterres was still waiting for a response from Russian President Vladimir Putin.

As a solution to the lack of access to SWIFT, UN officials have asked US bank JPMorgan Chase & Co to start processing some payments for Russian grain exports with guarantees from the US government.

The United Nations is also working with the African Export-Import Bank to create a platform to help process Russian grain and fertilizer export transactions to Africa, a US trade official said last month.