The Black Sea grain deal is over after Russia quits.

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The Black Sea grain deal is over after Russia quits. The agreement that permitted the safe export of Ukraine’s grain via the Black Sea for the past year expired Monday after Russia withdrew and warned it could not guarantee the safety of ships, a move that the United Nations said would “strike a blow to people in need everywhere.”

Moscow indicated it would contemplate reviving the Black Sea agreement if its demands to increase exports of grain and fertilizer were met. However, according to U.N. Secretary-General Antonio Guterres, a U.N. pact that assisted Russia in making shipments over the past year has also been terminated.

“Only when Russia receives concrete results, not promises and assurances, will it consider restoring the agreement,” the Russian foreign ministry stated.

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Russia informed the International Maritime Organisation (IMO) that its “guarantees for the safety of navigation” were revoked and that “proactive necessary actions and response measures to threats posed by the Kyiv regime in the area will be taken.”

On Monday, insurers were evaluating whether to suspend coverage for any ships willing to sail to Ukraine. The reaction on the grain market was moderate, with U.S. wheat futures increasing by about 3 percent and U.S. maize futures increasing by nearly 1 percent.

German trader: “The market believes that Russia and the EU have ample wheat supplies that can meet global demand in the coming months as harvests arrive.”

The United Nations and Turkey negotiated the Black Sea agreement in July last year to combat a global food crisis exacerbated by Russia’s invasion of Ukraine in February 2022. Ukraine and Russia are two of the world’s leading exporters of cereals.

On Monday, his spokesperson stated that Ukrainian President Volodymyr Zelenskiy noted that everything must be done to ensure the continued use of the Black Sea grain export corridor.

U.N. Secretary-General Guterres told reporters, “The Russian Federation’s decision today will be a blow to those in need worldwide.”

Guterres stated that the United Nations would continue attempting to guarantee unfettered access to global markets for Ukrainian and Russian food products and fertilizers.

Linda Thomas-Greenfield, U.S. Ambassador to the United Nations, described Moscow’s action as “cruel.”

THE LAST SHIP HAS SAILED

According to the agreement, Ukraine has exported nearly 33 million metric tonnes of maize, wheat, and other grains. On Sunday, the final ship departed Ukraine as per the agreement.

In July 2022, to persuade Russia to accept the Black Sea agreement, U.N. officials signed a three-year memorandum of understanding, agreeing to assist Russia in exporting its food and fertilizer to foreign markets.

Russia’s primary demands included the resumption of ammonia exports via a conduit to the Ukrainian port of Odesa and the reconnection of its state agricultural bank, Rosselkhozbank, to the SWIFT international payments system. The European Union cut it off in June last year after the invasion. 

Guterres stated on Monday that the U.N. had created a “bespoke payments mechanism” for the Russian Agricultural Bank through the U.S. bank JPMorgan Chase & Co. (JPM.N) and “recently brokered a concrete proposal” with the European Commission to allow a Rosselkhozbank subsidiary to regain access to SWIFT.

As a result of Russia’s withdrawal from the Black Sea agreement, its pact with the United Nations on its exports was also terminated, under which Moscow had agreed to “facilitate the unimpeded export of food, sunflower oil, and fertilizers from Ukrainian-controlled Black Sea Ports.”

GLOBAL HUNGER On Tuesday of last week, Guterres sent a letter to Russian President Vladimir Putin requesting an extension of the Black Sea grain agreement in exchange for European Commission cooperation on Rosselkhozbank.

Russia stated in a letter to Guterres on Monday that the presented options “are not feasible and will not ensure uninterrupted cross-border financial transactions,” according to a tweet by Russia’s deputy U.N. envoy Dmitry Polyanskiy. According to him, the letter informed Guterres that Moscow was terminating the grain agreement for the Black Sea.

Ursula von der Leyen, president of the European Union Commission, termed Russia’s decision a “cynical move” and stated that the EU would continue to work towards security for developing nations.

Turkish President Tayyip Erdogan stated that he believes Putin desires the continuation of the agreement, adding that he will discuss this with Putin in August when they meet in person.

Russia had agreed three times in the past year to extend the Black Sea deal, but at the end of October, in response to a drone attack on its fleet in Crimea, it momentarily suspended its participation.

Concern existed regarding the impact of the accord’s expiration on feeding the world’s hungry.

Under the agreement, the United Nations’ World Food Program (WFP) purchased 80% of its wheat from Ukraine in 2023, up from 50% in 2021 and 2022. To combat famine, the WFP has sent approximately 725,000 metric tons of Ukrainian grain to Afghanistan, Sudan, Djibouti, Ethiopia, Kenya, Somalia, and Yemen.

This (deal) was one of the few glimmers of hope in this period of biblical famine, according to the Secretary General of the Norwegian Refugee Council, Jan Egeland.

Michelle Nichols and Guy Faulconbridge contributed to the reporting; Rachel More in Berlin, Micheal Hogan in Hamburg, Emma Farge in Geneva, Bansari Mayur Kamdar in Bangalore, Huseyin Hayatsever and Ali Kucukgocmen in Istanbul, and Max Hunder in Kyiv contributed to the reporting; Nigel Hunt, Nina Chestney, and Michelle Nichols contributed to the writing; David Evans and Grant McCool edited the piece.