Categories: Business

Black Sea Grain Initiative: Putin’s latest move will reverberate around the world

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CNN

Russian President Vladimir Putin appears to have declared open season on the consequences of Ukraine’s grain exports, targeting the port city of Odesa with new ferocity and threatening food prices. all over the world.

On the strikes in Odesa, Putin says he wants compensation for the damage almost 12-mile bridge connecting annexed Crimea to mainland Russia.

But they also coincided with Russia’s withdrawal from a year-old agreement known as the Black Sea Grain Initiative to keep Ukraine’s grain flowing to the world.

RELATED: Wheat prices rise as Russia-Ukraine tensions flare

While Russian food exports are supposed to be exempt from Western sanctions, Russia cited barriers to its own exports as a reason for withdrawing from the grain deal with Ukraine.

The attacks in Odesa, meanwhile, lit up the night sky Monday and Tuesday and targeted the city’s port, a key piece of infrastructure where Russia allows grain to be exported as part of the deal. which was brokered in July by the United Nations and Turkey.

Russia, on the other hand, is already worried about Turkey’s decision to allow Sweden to join NATO, apparently along with US promises to allow Turkey to buy F-16 fighter jets.

Then Ukraine claimed the credit for the damage to bridge on Monday, just as the future of the grain deal is being questioned.

On Tuesday, US Agency for International Development administrator Samantha Power visited Odesa to announce an additional $250 million in support for Ukraine’s agricultural sector, which is a key block in the global wheat market.

I asked Alex Marquardt, CNN’s senior national security correspondent in Odesa, about this week’s attacks and whether they could be directly tied to the grain issue and Putin’s anger over the key damage. bridge

He sent me this email:

Odesa was attacked in the past, as all Ukrainian cities are regularly, with drones and missiles. They are often lashed out of the sky, causing damage and injuring – if not killing – people but always missing their target.

What has happened over the past two nights – and especially the night before – has been astonishing. The attack, according to the mayor, was like nothing Odesa had seen since the beginning of the war. A “fierce battle” that starts at 2 am, non-stop for more than an hour.

After the first night, Monday, the Kremlin said it was a response to the attack on the bridge. But (Ukraine President Volodymyr) Zelensky said that Wednesday, after the second night, the strikes were about the grain deal and there was a lot of damage done at the port last night. That this comes right after Russia pulled out of the grain deal is not lost on anyone.

Marquardt also interviewed Power about the attacks and their impact on Ukraine’s contribution to the global market. See his report.

“The idea that Putin would play roulette with the world’s hungriest people during the greatest food crisis of our lifetime is deeply troubling,” Power told Marquardt.

He asked if he thought Russia might rejoin the grain deal.

“This requires pressure not only from the United States and the United Nations, but from the countries of sub-Saharan Africa that will suffer the most from the high prices of grain and oil,” said Power.

He expects Russia to continue targeting pieces of infrastructure as it deals with military failures.

“If you’re a bully and an aggressor, it’s easier to lob missiles and send drones into civilian infrastructure. So, I think we should expect the worst from Russian Federation as it continues to struggle on the battlefield.

Wheat and corn prices on world commodity markets jumped Monday after Russia pulled out of the deal, and they rose again Wednesday after the attacks on the ports of Odesa and as hope faded. for Russia to rejoin the grain deal.

From a report by Anna Cooban on CNN Business:

Last year, economic shocks including the effects of the war in Ukraine and the pandemic were the main causes of “acute food insecurity” in 27 countries, affecting almost 84 million people, according to a report by the Food Security Information Network, a data-sharing platform funded by the European Union and the United States. The FSIN defines severe food insecurity as the lack of sufficient food to the extent that it puts a person’s life or livelihood at risk.

The International Rescue Committee (IRC) said in November that the collapse of the agreement “will hit those on the brink of starvation.” The warning came after Moscow suspended its participation in the agreement for several days following drone attacks on Sevastopol, a port city in Russian-controlled Crimea.

UN Secretary-General Antonio Guterres also said at the time that the breakdown of the agreement would be a “crisis of [food] affordability to a crisis of availability” when farmers around the world cannot get the fertilizers they need before the planting season.

Turkey has brokered previous versions of the grain deal and it plans to host Putin for talks in August.

In the absence of a new grain deal, the options are to use the railways to ship Ukrainian grain to ports in Romania or southeast Europe. The problems in both of those scenarios are time and money, according to Simon Everett, a professor of international trade and economic development at the University of St. Gallen in Switzerland. He told CNN’s Rosemary Church that Romania’s ports are now being expanded.

The Church noted that China is dependent on grain from Ukraine and wondered if Beijing can rely on Russia to restore the agreement.

Everett said that it is true that China is also suffering from droughts that are affecting its domestic production.

“If those droughts are going to be as important as people are emphasizing, then maybe Beijing will be motivated to put leverage on Russia to keep them going,” Everett said. “But I think there’s a series of ifs there. It’s not clear yet if Beijing is more concerned about its own food security needs.”

Following the Kremlin’s decision to withdraw from the Black Sea Grain Initiative, a National Security Council spokesman warned that Russia could target civilian vessels in the Black Sea and blame Ukraine.

Russia has placed more sea mines near Ukrainian ports, NSC spokesman Adam Hodge said in a statement Wednesday. Earlier in the day, Russia’s Ministry of Defense said any ship sailing to a Ukrainian port could be considered to be carrying military cargo.

“We believe this is a coordinated effort to justify any attacks against civilian vessels in the Black Sea and blame Ukraine for these attacks,” Hodge said.

This story has been updated with additional details.

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