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John: The wartime agreement
allowing Ukrainian grain
shipments to safely navigate
Russia's blockade was hailed as
a beacon of hope when it was
reached last summer.
It eased a global food crisis
and has kept food prices around
the world stable ever since.
But it's set to expire Monday,
and Russia is threatening to
pull out of it.
As Ali rogin reports, that's
raising new fears about global
food security.
Ali: On the black sea, a rare
point of cooperation, between
two nations at war.
Ukraine has shipped nearly 33
million metric tons of grain,
oil, and other products since
the start of the conflict, all
thanks to the black sea grain
initiative, once touted as a
"Miracle" in wartime.
>> Today, there is a beacon on
the black sea.
A beacon of hope, a beacon of
possibility, a beacon of relief.
Ali: The groundbreaking deal has
been renewed three times since
its first signing, but it may
not be renewed again.
Russia has also slowed the pace
of shipments by delaying ship
inspections.
Ukrainian grain once left idle
in silos and granaries before
the deal, now sits waiting on
board dozens of vessels in the
waters off Turkey.
Russia is threatening to end its
cooperation altogether.
It claims the U.N. Hasn't done
enough to facilitate its own
exports of food and fertilizer.
But, president Vladimir Putin is
not ruling out a possible
return.
Putin: We can suspend our
participation in the deal.
And, if everyone once again says
that all the promises they have
made to us will be kept let them
fulfill these promises, and
then, we will immediately rejoin
this deal.
Ali: Russia has been exporting
record amounts of wheat in the
last year, while Ukrainian
officials report their grain
exports have dwindled.
But the deal's impacts extend
beyond eastern Europe.
>> The world needs it.
Russia has a responsibility to
prolong it.
Otherwise, global food
insecurity will be the
consequence.
So now the ball is in president
Putin's court, and the world is
watching.
Ali: Ukrainian grain feeds 400
million people worldwide, much
of it going towards emergency
programs in places like Yemen,
Afghanistan, and Somalia.
The grain deal has also helped
to calm global markets.
Food prices on the rise before
the war started but skyrocketed
after Russia's invasion.
Since the global export of
Ukrainian grain resumed, the
markets have stabilized.
That's been welcome news to
relief organizations like the
international rescue committee
in east Africa.
>> Any amount of food that
leaves the Ukrainian boats and
comes to the global market is
food in the market.
Food sitting at the port in
Ukraine does not help anybody.
Food moves out, it meets the
needs of the global market, and
it ensures that the global
markets are more stable.
Ali: But that stability remains
elusive, as the deal's
expiration date inches closer,
with no renewal in place.
For more on what is at stake I'm
, joined by Susanna savage with
political Europe.
Susanna, thank you so much for
joining us.
You've been reporting that the
Ukrainian capital of Kyiv
basically believes that this
deal is already dead.
And we also heard from national
security advisor Jake Sullivan
today.
Here's what he had to say.
Jake Sullivan: Look, I can't
predict what Vladimir Putin will
do.
He has been all over the map.
With respect to this initiative
over the course of the past many
months.
It is possible that Russia pulls
out of it.
It is possible they continue.
We are prepared for any
scenario, and we're working
closely with the Ukrainians on
that.
Ali: So in terms of scenarios,
what does your reporting tell
you is likely to happen.
>> Well, I think that at this
stage, Russia has given every
signal that it does intend to
pull out of the deal, and it
said this before, it's
repeatedly threatened to pull
out to the deal and then renewed
it.
But this time feels very
different.
But regardless of whether it
actually officially extends the
deal or not, the deal is
essentially not working as it
should.
The amount of shipments coming
out through the initiative have
plummeted in recent months.
And so Ukraine has started to
enact plan B and to put into
into works a different routes to
get its grain out of the
country.
So it's essentially preparing
for this deal not to continue.
Ali: And you just said that this
time seems different.
And Russia may not renew.
Why does it seem different?
>> In the past leading up to the
renewal, it's tended to slow
inspections of shipments, which
has and you know to slow
shipments, leaving the black sea
and with Ukrainian grain.
But this time, it's really
doubled down on the threats to
walk away and really stressed
the fact that it isn't seeing
and benefits from the deal by
which it means that it's not.
It's saying it's Russia claims
that it had there are too many
obstacles to its own food and
fertilizer exports.
And therefore it doesn't want to
continue with it.
It's really doubled down on
those threats.
The amount of shipments coming
out under the initiative has
plummeted.
There hasn't been a new vessel
of registered under the
initiative since the end of
June, for example, and the U.N.
And the eu have even tried to
come up with compromise offers
to try and keep Russia in the
deal, which have been rejected.
So I think that's one of the
signals that this is different
this time.
Ali: One of the things that
Russia had wanted was additional
sanctions relief.
They did get some relief for
their exports.
But they said that sanctions on
the logistical aspects of that
kind of trade, including
insurance and shipping
companies, those sanctions were
preventing countries from doing
business with them.
So were those sorts of
concessions ever on the table in
terms of this round of
negotiations?
>> Well, the eu has previously
carved out exemptions in terms
of its sanctions on Russia to
enable its food and fertilizer
exports.
And this time, what the eu and
the U.N. Have offered is to
carve out an exemption
essentially to allow Russia's
main agricultural bank to to
function under the swift
international payment system.
Russia's rejected that
concession or that compromise
and I don't think beyond that
there are further I don't think
, it's on the cards to to
further change sanctions to
appease Russia because as far as
the west is concerned, it's
-- its sanctions do not target
food or fertilizer exports, and
Russia is getting both these
exports out of the country.
Ali: You mentioned the plan B's
that Ukraine is working on what
-- on.
What are those?
>> There's been talk of Turkey
intervening in the Turkish Navy
escorting ships through the
black sea.
This has been dismissed by
various diplomats and other
analysts who say that that just
isn't necessary and isn't likely
to happen.
What Ukraine is doing is
organizing essentially state
insurance.
So a $500 million guarantee fund
to compensate companies who
ships passed through the black
sea for any damages or extra
costs they may incur if the
black sea and blacks initiative
isn't extended, because getting
insurance at the moment is
obviously very difficult.
It's also looking at extending
the amount of grain shipments
the past or grain exports that
passed through the danube river.
There's already a large amount
of grain that's exported through
solidarity lanes out through
Europe.
But it's trying to extend this
using the danube river, and that
seems to be a fairly viable
option.
Ali: Assuming this deal is not
renewed what then happens in
terms of market reaction as well
as immediate supply?
>> I think the market, we're not
looking at the same scenario as
we were last February, when
Russia invaded Ukraine and
blockaded the black sea and we
saw exports plummet almost zero
and a big market reaction.
I think the market has adjusted
to having slightly less
Ukrainian product in the market,
but also these other export
routes that there have been put
in place over the last year, and
that's one of the main functions
of the black sea grain deal.
It has succeeded in given
Ukraine time to adapt.
That said every time we see
, volatility or uncertainty over
this deal, there is a small
market reaction and that has a
big impact for food insecurity
insecure countries who are
really facing the brunt of the
current food crisis and high
food prices.
So I think we can expect a
market reaction of Russia walks
away from the deal and that
will, you know, inflict pain on
countries that are really at the
sharp end of this and
particularly in Africa.
Ali: Susanna savage with
political Europe.
Thank you so much for your time.
>> Thank you very much.