This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.bbc.co.uk/news/world-61759692

The article has changed 25 times. There is an RSS feed of changes available.

Version 10 Version 11
What is the Ukraine grain deal and why is Russia threatening to pull out? Ukraine grain deal: why is Russia pulling out?
(5 days later)
A grain ship in the port of Chornomorsk on Ukraine's Black Sea coastA grain ship in the port of Chornomorsk on Ukraine's Black Sea coast
Russia is threatening not to extend its grain deal with Ukraine after 17 July, when it expires. Russia has refused to renew a deal with Ukraine which allowed it to export grain through the Black Sea.
Over the past year, the deal has enabled Ukraine to export over 32 million tonnes of grain and other foods safely across the Black Sea despite the war. The deal enabled Ukraine to supply world markets with over 32 million tonnes of food products. It will now need to find alternative routes for its exports.
Why is the grain deal needed? What was the grain deal?
When Russia invaded Ukraine in February 2022, its navy blockaded the country's Black Sea ports.
The Ukraine grain deal let cargo ships pass safely along a corridor in the Black Sea 310 nautical miles long and three nautical miles wide, to and from the Ukrainian ports of Odesa, Chornomorsk and Yuzhny/Pivdennyi.
The deal was brokered in July 2022 by Turkey and the UN.
It also allowed the Russian navy to check ships for weapons at the Bosphorus Strait, at the entrance to the Black Sea.
Why is the grain deal important?
Ukraine is one of the world's largest exporters of sunflower, maize, wheat and barley.Ukraine is one of the world's largest exporters of sunflower, maize, wheat and barley.
When Russia invaded in February 2022, its naval vessels blockaded Ukraine's ports, trapping some 20 million tonnes of grain. That sent global food prices soaring. Russia's blockade meant some 20 million tonnes of grain became trapped in its Black Sea ports. This caused world food prices to soar.
It also threatened food supplies to a number of Middle Eastern and African countries which rely heavily on Ukrainian grain. It also threatened to cause food shortages in several African and Middle Eastern countries which relied on imports of Ukrainian grain.
The UN warned that 44 million people in 38 countries were facing "emergency levels of hunger". When the deal was signed and grain shipments restarted, world food prices declined by roughly 20%, according to the UN's Food and Agriculture Organization.
Since the grain deal was signed in July 2022, world food prices have decreased by some 20%, according to the UN's Food and Agriculture Organization. Why has Russia refused to renew the grain deal?
Ukraine grain deal needed to feed world – WFP head When the UN brokered the deal, it told Russia it would help it increase its exports of grain and fertilizers.
Why is Russia threatening to pull out of the grain deal? Although Western countries have imposed no sanctions on Russia's agricultural products, Russia says the sanctions it did impose have deterred shipping firms, international banks and insurers from dealing with its producers.
The deal is meant to be extended for 120 days at a time, but in March and May 2023, Russia agreed to extensions of only 60 days. What sanctions are being imposed on Russia?
Now it is threatening to pull out altogether. Russia asked for its state-owned agricultural bank, Rosselkhozbank, to be reconnected to the SWIFT fast payment system (from which all Russian banks were barred in June 2022).
It wants Western sanctions to be relaxed to enable its own producers to export more food and fertiliser. The UN suggested that Russia set up a subsidiary of the bank, which would be allowed to use SWIFT - but Russia refused that option, saying it would take too long.
There are no specific sanctions against Russian agricultural exports, but Moscow argues that other sanctions deter international banks, shipping firms and insurers from doing business with its producers. Other suggested schemes, such as processing payments for food and fertilizer through the US bank JPMorgan Chase, or through the African Export-Import Bank, also fell through.
Russia temporarily withdrew from the deal in November 2022, accusing Ukraine of launching a "massive" drone attack on its fleet in Crimea from vessels in the safe shipping corridor in the Black Sea. What other export routes are there for Ukrainian grain?
How does the grain deal work? The EU has a plan for distributing Ukrainian grain which cannot be shipped through the Black Sea.
On 22 July 2022, Russia and Ukraine signed the Black Sea Grain Initiative - a deal brokered by the UN and Turkey. It says it can be transported across Ukraine's border with Poland and taken to ports on the Baltic Sea, or by rail and barge to the Romanian port of Constanta.
It lets cargo ships pass safely through the Black Sea, along a corridor 310 nautical miles long and three nautical miles wide, to and from the ports of Odesa, Chornomorsk and Yuzhny/Pivdennyi. Since the start of the war, Ukraine has been sending about 10% of its grain exports across its land border with Poland. However, there are likely to be logjams if it exports more grain via this route.
The first grain shipments started in early August 2022. Ukraine's railways have a different gauge to those in the rest of Europe, which means that every trainload of grain has to be transferred from one set of wagons to another at the border.
How much grain has being exported? Also, the rail network in Eastern Europe does not have the capacity to transport to the Baltic ports and Constanta even the relatively low volumes of grain that Ukraine has been exporting by land up until now.
The UN's Joint Coordination Centre, which runs the scheme, says that since it began, 32 million tonnes of foodstuffs have been shipped from Ukraine, as well as fertiliser. Most of this grain has stayed in east European countries such as Poland, Hungary, Romania, Bulgaria and Slovakia rather than being transported any further. It has glutted their markets and caused local food prices to crash.
In June 2023, Ukraine exported less than 1.4 million tonnes of foodstuffs. Nine months previously, it had been exporting about four million tonnes a month. To protect farmers' incomes in these countries, the EU has agreed to restrict Ukraine's food exports there until 15 September.
This is partly because Ukrainian farmers are producing less, due to the ongoing fighting across large parts of the country. Where have Ukraine's food exports gone?
However, Ukraine's government says Russia has also been delaying cargo ships heading to its ports to load with food products, by stopping them to inspect for weapons. The UN says that of all the food products Ukraine has exported under the grain deal over the past year:
"Ukraine has accused it of being overly picky with the inspections," says Bridget Diakun, from the shipping journal Lloyds List. "There is usually a queue of about 100 ships in the entrance to the Black Sea."
Where do Ukraine's food exports go?
The UN says that of all the food products Ukraine has exported under the grain deal:
47% have gone to "high-income countries" including Spain, Italy and the Netherlands47% have gone to "high-income countries" including Spain, Italy and the Netherlands
26% have gone to "upper-middle income countries" such as Turkey and China26% have gone to "upper-middle income countries" such as Turkey and China
27% have gone to "low and lower-middle income countries" such as Egypt, Kenya and Sudan27% have gone to "low and lower-middle income countries" such as Egypt, Kenya and Sudan
Russia's President Vladimir Putin has criticised Ukraine for not exporting more to developing countries. The UN says that under the grain deal, Ukraine has shipped 625,000 tonnes of food as humanitarian aid to Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen.
But the UN says the grain deal has benefited people throughout the world because it has brought more food products onto the global market and therefore reduced global prices. In 2022, more than half of the grain bought by the UN's World Food Programme came from Ukraine.
The UN says that under the grain deal, it has shipped 625,000 tonnes from Ukraine for humanitarian aid in Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen.
In 2022, more than half of the wheat grain bought by the UN's World Food Programme came from Ukraine.
Pictures provide evidence of Russian grain theftPictures provide evidence of Russian grain theft
How have other eastern European countries been affected?
The EU lifted trade restrictions on Ukrainian food exports to member countries at the start of the war, to help Ukraine's economy. This caused a glut of grain and other food products in neighbouring east European countries.
The governments of five of these countries - Hungary, Poland, Slovakia, Romania and Bulgaria - have complained that the flood of cheap Ukrainian food products has hit their own farmers' incomes.
The EU has agreed to restrict Ukraine's food exports to these countries until 15 September.
Correction 17 March 2023: A reference to the volume of the WFP's wheat grain procurement was amended.
Related TopicsRelated Topics
Russia-Ukraine warRussia-Ukraine war
TurkeyTurkey
FoodFood