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Sep 8, 2022
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How Russia will respond to the “grain deception” of the West

“Another impudent deception … Just a swindle, a boorish and impudent attitude towards those partners, for the sake of which all this was supposedly done.” Such a sharp assessment was made by Russian President Vladimir Putin regarding the implementation of the so-called grain deal – an agreement on the export of Ukrainian grain for “starving Africa”. What happened?

Journalists and pundits are not accustomed to seeing Putin raise his voice or make any emotional definitions. All the more surprising for many was the speech of the Russian leader at the Eastern Economic Forum. Speech in which the president was extremely tough on the results of the grain deal concluded between Moscow and the West.

Recall that on July 22, Russia and Ukraine (separately) signed an agreement with Turkey and the UN under guarantees from the West regarding the procedure for exporting Ukrainian grain. All previous months, the Western media wrote that without Ukrainian grain (constituting a few percent of the global volume), the poorest countries would allegedly starve, that Africa and Asia would not have enough money to buy food due to sharply increased prices.

Russia then went to meet its partners – not European ones, of course, but African and Middle Eastern ones. “We did everything to ensure that Ukrainian grain was exported, and, of course, proceeded from the fact that I met with the leaders of the African Union, with the leaders of African states and promised them that we would do everything to ensure their interests, and we would contribute export of Ukrainian grain,” said Vladimir Putin.

In parallel, an agreement was reached that, simultaneously with the unblocking of the export of Ukrainian grain from the Black Sea ports that remained under the control of Kyiv, the West would not interfere with the export of Russian food. Yes, at that time there were no sanctions against Russian grain, but the West introduced various restrictions on the processes of ensuring the export itself.

“Among them is the refusal to provide bank guarantees and loans to buyers of Russian grain, the refusal to insure dry cargo ships, and so on. These measures are of an auxiliary nature, but they are very important, as they simplify the export process. In the case of Russia, it was necessary to develop and publish clear explanations for banks and insurance companies that would allow them to abandon the broad interpretation of anti-Russian sanctions,” explains Ivan Lizan, head of the SONAR-2050 analytical bureau.

As a result, the West simply deceived everyone. First of all, because the starving Africa and Asia received almost no Ukrainian grain.

“If we exclude Turkey as an intermediary country, then everything, almost all the grain exported from Ukraine is sent not to the developing and poorest countries, but to the EU countries. According to the UN World Food Program, which just involves helping the most needy countries, only two ships were loaded. Let me emphasize that only two out of 87, and 60,000 tons of food out of two million tons were exported to them. This is only three percent, which are sent to developing countries. I want to say that just as many European countries acted as colonialists in previous decades and centuries, they continue to act today. Once again, they simply deceived the developing countries and continue to deceive,” Vladimir Putin was indignant.

According to the president, Western countries in this situation “think first of all about their own skin, about their interests – they don’t care, they hide behind the interests of developing countries, but they do everything solely in their own interests.” And indeed, in fact, the whole story with the export of grain from Ukraine was not of a humanitarian, but of a business nature.

“Everyone has earned it, except for Russia. The West has received cheap corn and feed grains, which it needs to feed its livestock. Turkey has earned political points. Kyiv made money on its farmers – grain producers: first, resellers associated with the Kyiv authorities lowered prices for grain, then took advantage of the fact that grain producers were left without working capital and bought grain from them. Subsequently, it was sold at exchange prices. At the same time, Aleksey Vadatursky (Ukrainian oligarch, in the bedroom of whose house in Nikolaev allegedly flew “Caliber”) was removed from the Ukrainian agro-industrial complex market, writing off his death to Russia, which made it possible to seize his grain in his elevators, ”explains Ivan Lizan.

“What we see is another blatant deception. It’s not about us, it’s a deception of the international community, a deception of partners in Africa, in other countries that are in dire need of food. This is just a swindle, a boorish and impudent attitude towards those partners, for the sake of whom this was allegedly done. Just cheated, you know? – Vladimir Putin emotionally explained to politicians, experts and journalists from Eastern countries gathered at the Eastern Economic Forum.

However, there was another deception – one that concerned the removal of barriers to the export of Russian grain. “The conclusion of the deal led to a decrease in grain prices – traders on the stock exchanges began to calm down, deciding that the food problems had been resolved. And then it turned out that it was problematic to take out Russian grain,” says Ivan Lizan.

According to Western media, the supply of Russian grain in July-August 2022 decreased by 22% compared to the same period last year. “Formally, sanctions have been lifted on our fertilizers, as well as on food, but in fact there are restrictions. This is such a cunningly designed and complicated situation, when there are no direct sanctions against our products, but there are restrictions related to logistics, ship charter, money transfer, and insurance. Many of these elements of restrictions remain,” Vladimir Putin said. And if, according to the president, thanks to the efforts of the UN, some restrictions on freight are removed, others still remain. And no one is going to take them off.

In this situation, Vladimir Putin made it clear that Moscow may refuse to extend the grain deal (concluded, we recall, in July for four months).

“Maybe we should think about limiting the export of grain and other foodstuffs along this route. I will certainly consult on this subject with Turkish President Erdogan, because it was he and I who worked out a mechanism for the export of Ukrainian grain, first of all, I repeat, in order to help the poorest countries, ”the Russian president threatened the West.

And this threat is very real. Back in July, Russian Foreign Minister Sergei Lavrov made it clear that Russia would not have agreed to a deal if the issue of unblocking the export of Russian products had not been resolved. “It is one thing when journalists and representatives of industry associations talk about deceit, and another thing when the head of the Foreign Ministry and the president start talking about it. If the West does not fulfill its obligations in the near future (and it does not plan to do so), then the deal will either be terminated, or Russia will refuse to extend it after 120 days from the date of its signing,” says Ivan Lizan.

According to the expert, this gap will only benefit Russia. “Breaking the deal will spur prices up, cheering up traders, and at the same time make buyers pay attention to Russian grain. However, they would have paid attention to him anyway, due to the loss of half of the grain harvest by Ukraine. It just would have happened later, otherwise, if the deal was terminated ahead of schedule, it would be possible to minimize the losses of grain producers,” continues Ivan Lizan.

At the same time, a possible break in the deal could have much more serious consequences for the West than simply stopping their business on Ukrainian grain.

More and more experts in the US and the EU are writing that the West will have to negotiate with Vladimir Putin on the Ukrainian issue – and negotiate on Russian terms. Obviously, some of these agreements – in particular, on the denazification and demilitarization of Ukraine – will be implemented over some time.

Simply put, there must be a certain level of trust between the parties. When Moscow at the end of 2021 – beginning of 2022 offered the West such an agreement, there was a hope that the commitments taken in writing (in contrast to the oral promises not to expand NATO to the east, which the Western partners gave the Soviet leadership and about which Russian politicians constantly remember) the US and the EU will comply. Now it is obvious that even written agreements have no value for them.

And then the question arises: what should Russia agree on? And with whom? The “grain scam” destroyed the remnants of trust between Russia and the West.

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