Russia says Western sanctions continue to hamper its grain and fertiliser exports

A senior United Nations (UN) official says they continue to iron out concerns raised by the Russian Federation after complaints that Western sanctions continued to hamper its grain and fertiliser exports.

The UN brokered a packaged deal along with Turkey in July to restart Ukrainian grain exports from three Black Sea Ports while also facilitating similar Russian exports.

Western nations have been adamant that their sanctions against Russia do not extend to grain and fertiliser exports, but Moscow maintains that the punitive measures are having a chilling effect on its shipments.

The agreement is seen as a key peg to bringing down global food prices in the aftermath of Russia’s invasion of Ukraine last February.

Russia has asserted that none of its grain or fertilizer had been exported under the UN-brokered agreement, arguing that logistical sanctions and restrictions on their ships entering Western ports or securing insurance had curtailed access to world markets. But the UN has indicated they are very much engaged on the issue.

“We have made important progress in all these issues but there are issues still to be resolved in those three in insurance and financing and in the shipping industry. We have made progress because clarifications within the sanctions framework have been provided by the US and by the E.U.

“And it has been clarified that food and fertilizers have no sanctions for insurance to be given for the ships carrying food and fertilisers. It has been also clarified that the banks can make transactions when the food and fertilizers are the subjects, and also that ships carrying food and fertilizers can get to the ports, especially to the European ports, if carrying food and fertilisers,” says Secretary-General of UN Conference on Trade & Development, Rebeca Grynspan.

The United Nations maintains that the export deal is a commercial one – driven by humanitarian imperatives but where the private sector and commercial shipping needed to engage.

“We have to go, we have to talk and we have to explain because no doubt, as I said before, the market showed a chilling effect from the private sector. So this is a process that we are working on and that we are focusing on from the beginning precisely to comply with the terms of the memoranda of understanding that was signed in Istanbul. And we will continue doing so; this is not like one stroke will solve all the problems,” Grynspan adds.

Almost 3 million tonnes of shipments have been exported from three Ukrainian Black Sea Ports since the deal was signed in Istanbul in July.

“Keeping those ships moving is sometimes a challenge but we have done without any kind of serious incident raising the confidence in the shipping industry and people buying that you can actually send ships, you know, through the Black Sea, get them loaded and bring them back. And what we need to do is hopefully we will get more ships into this part of the trade. We will need to make sure that we can keep inspecting them in time. Our inspections have been more or less keeping track and level with the number of vessels that we have going through because we don’t want ships to have to wait an inordinate amount of time because that’ll get a bad news story out. But so far, so good. And, you know, there are, I believe, enough encouraging signs that we will see an uptake,” says UN coordinator, Black Sea grain initiative, Amir Abdulla.

The 120-day deal will have to be renewed by all the parties when that period lapses closer to the end of the year.

Rebeca Grynspan also conceded that while the international prices of food have gone down as a result of the deal, prices at the domestic level have not necessarily followed suit, often due to the devaluation of currencies or hikes in interest rates as a result of rising inflation among other concerns.

And given that lowing prices at the domestic level is a key objective of the agreement, the unimpeded export of food and fertilizer from the Russian Federation must become more concrete.