On March 18, Turkish President Recep Tayyip Erdogan announced the extension of the grain agreement. This was done thanks to the negotiations that took place with both parties, Erdogan was quoted by the Turkish newspaper Haberturk.
The extension of the agreement has been confirmed by the UN. At the same time, the two sources did not name the terms of the extension. The Ukrainian side claims that the agreement has been extended for 120 days, as before. But Russian officials insist they only agreed to a 60-day extension. According to RIA Novosti, the representatives of the UN and Turkey have not set a timetable for the extension in principle of the grain agreement.
Russia demanded to connect Rosselkhozbank to the SWIFT payment system, resume deliveries of agricultural machinery and remove other obstacles to the export of Russian food products
Russia’s permanent representative to the UN, Vasily Nebenzya, has sent a letter to the UN confirming that the grain deal has been extended for exactly 60 days. This letter was posted on Twitter by his first deputy Dmitry Polyansky. The letter indicates that Russia is ready to consider the issue of extending the agreement after May 18, but only if a number of conditions are met. Thus, the Russian side demands to reconnect Rosselkhozbank to the SWIFT international payment system, to resume deliveries of agricultural machinery and spare parts to Russia, to remove insurance and port access restrictions against ships and Russian goods, to restore the supply of ammonia via the Togliatti-Pipeline of Odessa, to unblock the accounts and authorize the financial activities of the Russian producers of mineral fertilizers.
For Russian companies, the extension of the grain agreement in the form in which it was implemented before does not matter. The increasing pace of shipments of Russian grain and other products abroad is the merit of Russian exporters, Anatoly Tikhonov, director of the Center for International Agro-industry and Food Security of RANEPA, expressed his opinion. At the same time, the world market is the first to suffer from the lack of Russian grain deliveries. Russia accounts for around 20% of all world wheat exports. While Ukraine mainly supplies corn and fodder grains, which are used to feed livestock. Additionally, wheat production in Ukraine has dropped significantly this season, while Russia received an unprecedented harvest. And the shortage of Russian mineral fertilizers in 2023 will lead to a reduction in the harvest in many countries of the world, the UN pointed out.
The Grain Exporters Union has repeatedly noted that settlement, freight and insurance issues remain, it’s just that companies have adapted to the new conditions. At the same time, Russia is trying to achieve the implementation of the second part of the grain agreement (concerning the removal of barriers to the export of Russian food products and mineral fertilizers) from the very beginning. So, last fall, according to Reuters, Russia turned to Western countries with a proposal to lift sanctions against Rosselkhozbank, allowing it to restore ties with correspondent banks to process payments for grain exports. This would speed up the settlement of export contracts, which would boost the turnover of goods and the pace of shipments, Eduard Zernin, chairman of the board of the Union of Grain Exporters, told RG.
In agricultural machinery, imports account for about 40%, with most supplied from hostile countries until spring 2022. But after the start of the NWO, well-known Western companies stopped deliveries of agricultural machinery and spare parts to Russia. To replace this import, it will not take a year or two, market players have pointed out.
