Ukraine and Russia sign grain deal – what next?

23 July 2022

12:47 AM

23 July 2022

12:47 AM

This afternoon Kyiv and Moscow signed a UN-backed agreement to free up at least 20 million tons of grain from blocked ports. Ukraine said it would not sign a deal with Russia directly, only with Turkey and the UN. As Wolfgang Münchau noted this morning, it marks the first successful mediation between the two sides since the start of the war.

This deal will complicate Vladimir Putin’s efforts to strangle the Ukrainian economy. But the Russian leader needs to show countries that are neutral – or more inclined towards Russia (in Africa and Asia) – that he saved them from hunger and rising food prices. Otherwise, Algeria could increase gas supplies to Europe and Egypt could supply Ukraine with hundreds of units of Soviet weapons and military equipment.

A temporary truce is dangerous for Ukraine. It gives Russian troops time to reinforce on their way to Odessa – a strategic Ukrainian port city – and strengthen their defensive positions. That’s why the Ukrainian government claims that keeping cities such as Odessa secure is their absolute priority.

‘Any guarantees that Russia may give to anyone are not considered valid, and we do not pay attention to them. There are guarantors, Turkey and the UN, and we work with them’, said Ukrainian president Volodymyr Zelensky’s adviser, Mykhailo Podolyak. He added that any ‘provocations’ by Russia over the deal would result in a ‘military response’.

Despite these concerns, a grain deal is vital for Ukraine and the rest of the world. Before the war, Ukrainian ports shipped five million tons of agricultural products every month. On news of a possible deal, the price of Chicago wheat futures – a benchmark for the global wheat market – fell by three per cent. Now Ukraine has received a welcome boost to its economy, without making concessions to Putin.

Sign up for the weekly Ukraine in Focus newsletter here.

Got something to add? Join the discussion and comment below.

Show comments