How Russia is holding Ukraine’s wheat exports to ransom

Putin is holding Ukraine’s wheat exports to ransom

11 June 2022

9:00 AM

11 June 2022

9:00 AM

Starvation is a weapon as old as war itself. But Vladimir Putin has put a perversely postmodern twist on the ancient stratagem. Instead of menacing his Ukrainian enemy with hunger and poverty, he is threatening the whole world. Putin has long used oil and gas as a political instrument, most recently cutting off supplies to Poland and Bulgaria in retaliation for their refusal to pay their bills in roubles. But it is Putin’s blockade of the export of Ukrainian wheat that could prove just as effective in Russia’s war of weaponised commodities.

Together, Russia and Ukraine produce 30 per cent of the global wheat exports. Ukraine is the world’s sixth biggest exporter of grains, almost all of it through seven Black Sea ports from Odessa to Mariupol. Seeing this vulnerability, the Kremlin made a naval blockade of Ukraine a top priority in the build-up to war. In January and February of this year, one of the earliest bellwethers of the coming conflict was the mass recall of Russian warships from stations as far afield as Africa and the Arctic to redeploy in the Black Sea. On the opening day of the Kremlin’s ‘special military operation’ against Ukraine, Russian aircraft bombed a Turkish-flagged freighter 50 miles outside Odessa. The next day the Panamanian–registered grain ship Namura Queen was targeted by a Russian anti-ship missile on its approach to the port of Pivdenniy, and the Moldovan-flagged Millennial Spirit was also hit and damaged nearby, injuring several crew members.

These early attacks on non-Ukrainian ships well beyond Kyiv’s territorial waters sent a very deliberate message: Ukraine’s ports were strictly off limits to international shipping until the Kremlin said otherwise. To back up the threat, the Russian Black Sea fleet has, according to Ukraine’s Ministry of Defence, deployed around 20 surface vessels and four submarines on constant patrol between Serpent Island and Sevastopol, along with Bal and Bastion coastal missile systems as well as strike aviation based in Crimea. In response to the threat of an amphibious assault on Odessa, the Ukrainian navy also laid mines across the entrances to its principal harbours.

The result of Russia’s ‘piracy’, according to Ukraine’s infrastructure minister Oleksandr Kubrakov, is the risk of famine ‘on a global scale’. The Kremlin does not ‘care about the lives of people in Africa,’ Kubrakov said last week. ‘They’re telling them: “We don’t care about you. We are only worried about sanctions against us. Now you are hostages.”’

The sinking of the missile cruiser Moskvaby a pair of Ukrainian-made anti-ship missiles on 14 April may have put a dent in Russian ability to launch seaborne landings – but not in its ability to strangle Ukraine’s shipping. Around 70 merchant vessels loaded with grain and other critical cargo have been unable to leave Ukrainian ports for the past three months. Last month Ukraine’s President Volodymyr Zelensky estimated that some 22 million tons of food products – including wheat and corn, barley and sunflower seeds, a key source of vegetable oil – remain trapped.

That backlog has created supply crunches and price spikes that are already being felt around the world. Unlike oil and gas, grain has no equivalent of ‘swing producers’ like Saudi Arabia who can simply open the spigots and pump more on demand. Nitrogen fertilisers and industrial farming may have boosted yields to levels unimaginable in a pre-modern age, but the immutable annual cycle of production of planting, harvest and storage hasn’t changed since the days of Rameses II and his famous Jewish agronomist, Joseph.

Crucially, Ukraine’s grain is cheap, and is therefore usually exported to the world’s poorest countries. Egypt, Turkey and Lebanon all import up to 80 per cent of their wheat from Ukraine and Russia. Ukraine alone accounts for some 14 per cent of the EU’s grain imports. The United Nations has already warned that the export crisis could see food and animal feed prices worldwide rise by up to 22 per cent, but some countries have already been affected far more seriously. The World Food Programme reports that the cost of a food basket in Ethiopia has risen 66 per cent and the cost in Somalia was up 36 per cent in the wake of Putin’s invasion.

Small wonder, then, that lifting Russia’s grain blockade has become a central talking point in international diplomatic efforts to end the war. It was a key item of discussion in an 80-minute phone call between Putin and the German Chancellor Olaf Scholz and the French President Emmanuel Macron last month. This week, Russian foreign minister Sergei Lavrov flew to Ankara to discuss the issue with Turkish officials.

Putin has denied there is any attempt at a blockade and instead blames Ukrainian mines for stopping the grain trade. ‘Russia is ready to help find options for the unhindered export of grain, including the export of Ukrainian grain from the Black Sea ports,’ Putin told Macron and Scholz, according to the Kremlin’s readout. And he told Russian TV that Russia would ‘not use the de-mining situation to carry out some kind of attack from the sea’. But there was a catch. The price of Russian cooperation would be the ‘removal of the relevant sanctions [on] the supply of Russian fertilisers and agricultural products’ in return. Putin also warned the French and German leaders against ramping up arms supplies to Ukraine, saying they could ‘further destabilise the situation’. The link may not have been explicit, but the implication was clear – if you want Ukrainian grain, lift sanctions and stop supplying weapons.

Kyiv has been urging its western supporters to force the Russians to open up the Black Sea, or to give Ukraine the capability to do it themselves. Ukrainian civilian and military officials have asked for several pieces of powerful US-produced anti-ship weaponry. But giving Kyiv the capability to blow more Russian battleships out of the water won’t solve the problem of mines – the removal of which would leave Ukrainian ports vulnerable to marine assault – or hinder the Russians’ ability to attack merchant ships with their own missiles. Nor would extra fire power help with the mundane but crucial problem of maritime insurance, without which no commercial shipping can operate and which does not cover ships entering a war zone.

A more realistic solution could be a maritime ‘humanitarian corridor’ through the territorial waters of Ukraine, Romania, Bulgaria and Turkey all the way to the Bosphorus Strait. Ideally, such a corridor would be under the auspices of the United Nations. The alternative would be for the four western Black Sea nations to patrol the corridor with their own navies, which have extensive experience of joint operations under the auspices of Nato. But that would involve Nato and Russian warships going head-to-head, raising a serious threat of direct conflict that could quickly escalate into world war.

Putin planned his war in Ukraine to be a lighting-fast surgical operation to decapitate the Ukrainian leadership and quickly occupy supposedly pro-Russian swaths of the country’s east. The Russian navy clearly prepared for a blockade of the Ukrainian coast, presumably to apply maximum economic pressure on a collapsing Kyiv government. Neither the Kremlin’s land nor sea operations were intended to be in place for long. But as Russia’s offensive in Donbas turns into a bloody, destructive grind, it’s the blockade that has turned into an unexpected ace up Putin’s sleeve. Military defeat would spell the end of him and his regime. Putin may deny that he is deliberately blockading Ukrainian ports. But in practice he will, as usual, try to extract the highest possible price for the removal of his stranglehold on the world’s food supplies.

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