Russia signals end of Black Sea Grains Agreement in July if demands are not met Ship’s crew

UNITED NATIONS, May 25 (Reuters) – Russia on Thursday signaled that if demands to improve its grain and fertilizer exports are not met, it will agree to a deal allowing for the safe export of the same products from three Ukrainian Black Sea territories during the war , will not extend beyond July 17 ports.

In March, the same threats and demands were made. Moscow then agreed last week to extend the Black Sea Export Pact by 60 days – originally negotiated by the United Nations and Turkey with Russia and Ukraine last July to ease a global goods crisis sparked by Moscow’s invasion of Ukraine in July February 2022 was tightened.

Since March, Russia appears to have prioritized two specific demands: reopening a pipeline to transport Russian ammonia to Ukraine’s Black Sea port of Pivdennyi for export to global markets; and reconnecting the Russian Agricultural Bank, known as Rosselkhozbank, to the SWIFT international payments network.

“If Rosselkhozbank is not connected to SWIFT and there is no progress in implementing other ‘systemic’ issues blocking our agricultural exports, the ‘Black Sea Initiative’ will also have to look for alternatives,” Russia’s Foreign Ministry said in a statement on Thursday.

Land exports through Europe were suggested as an alternative, as this route would be more expensive for Ukraine.

Rosselkhozbank was cut off from SWIFT by the European Union in June because of the Russian invasion. An EU spokesman said the union was not considering reintegrating Russian banks.

AMMONIA PIPELINE

Also, in a bid to persuade Russia to allow Ukraine to resume grain exports from the Black Sea, a three-year pact was struck last July in which the United Nations agreed to help Moscow handle its food and fertilizer shipments.

As part of the pact — and as an alternative to returning Rosselkhozbank to SWIFT — US bank JPMorgan Chase & Co has been processing some Russian grain export payments, sources told Reuters last month, and could be processing dozens more. But Russia has dismissed this as unsuitable in the longer term.

The United Nations is working with the African Export-Import Bank (Afreximbank) to create a platform to process transactions for Russian grain and fertilizer exports to Africa, the top UN trade official told Reuters on Wednesday.

The Black Sea Grains Agreement also allows for the safe export of ammonia. But the pipeline that Russia uses to pump up to 2.5 million tons of ammonia a year for export from Togliati to the Ukrainian port of Pivdennyi has not been put back into operation.

A Ukrainian government source told Reuters last Friday that Kiev would consider allowing Russian ammonia to transit its territory for export if the Black Sea Grains Agreement were expanded to include more Ukrainian ports and a wider range of goods.

The source said the text of the Black Sea Export Agreement does not cover the transit of Russian ammonia through Ukraine.

“The transit of ammonia, as well as the delivery of new grain portions, although not specified literally, is implied in the logic of the agreement,” the Russian Foreign Ministry said.

“Why does Ukrainian food continue to be successfully exported while Russian ammonia is not transported from Yuzhny port (Pivdennyi port)?” it asked.

Russia’s foreign ministry also complained that “no progress” had been made on its other long-standing demands — allowing farm machinery and spare parts to be shipped to Russia, lifting restrictions on insurance, and allowing Russian ships access to ports and cargo, and unblocking the accounts and financial activities of Russian fertilizer companies.

(Reporting by Michelle Nichols and David Ljunggren; Editing by Grant McCool)

(c) Copyright Thomson Reuters 2023.

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