Following the refusal of Poland and other neighboring countries to facilitate the transporting of Ukrainian grain, Romania and Moldova have in fact become the only transit states that can fully ensure its export. On the other hand, by creating alternative routes for Kyiv, Bucharest and Chisinau are at risk, given Moscow’s resolve to block Ukrainian agricultural exports
The so-called grain deal disrupted about a month ago created a lot of problems and a military threat to the north-western Black Sea region.
As you know, Ukraine, Russia and Turkey, brokered by the UN, concluded a food agreement in July 2022. It was extended for times: first for 120 days, then for only 60 days. In mid-July, Moscow refused to extend the deal any longer, withdrawing its guarantees for safe passage of ships to Ukrainian ports. In other words, Russia threatened to attack ships that decided to break the sea blockade of Ukraine. At the same time, the Russian Federation began systematically bombing the port infrastructure with drones and missile strikes in order to increase the risk of foreign ships and insurance companies entering Ukrainian ports. Recently, the Russian military conducted a demonstrative helicopter landing operation to inspect a bulk carrier on its way to the port of Izmail.
The “demise” of the Black Sea Grain Initiative was a big blow to Ukraine, which exported almost 49 million tons of grain and leguminous crops during the period of its operation. At the same time, 32.8 million tons of grain, mostly wheat and corn, were exported through the sea corridor. Their total value was about $8 billion. That is, 67% of all exported grain was transported through Black Sea ports.
According to experts, this year’s harvest in Ukraine will be lower than in previous years - about 50 million tons of grain. About 9 million tons of grain still remain in granaries. If we subtract domestic consumption volumes, the planned exports will be around 41 million tons.
Some countries that remain neutral on Russian military aggression are nevertheless making efforts to resume the grain deal in order to ensure reasonable food prices. Among those who have called to resume grain supplies are the African Union, the Pope, and China, which, albeit discreetly, still expects the grain deal to be fully implemented.
Ukraine also tries to wage an active foreign policy campaign to reopen the grain corridor, which allowed local farmers as well as the state budget to receive several billion dollars in revenue. After Moscow had opted out last year’s agreements, the Ukrainian government claimed that for them they remained in force. Moreover, Volodymyr Zelensky called for their continuation without Russia’s participation. According to the Ukrainian authorities, NATO and above all Turkey, which has a powerful navy, could provide convoying to guarantee safe passage of ships along the Black Sea routes. However, neither the North Atlantic Alliance nor Ankara showed any interest in this risky venture, reluctant to aggravate the situation and run the risk of a direct military clash with Russia.
Therefore, despite Kyiv’s ideas and political support of its allies, the situation has not changed much over the past month. The Kremlin seems to be determined and tries to organize a total naval blockade of Ukraine by all available means.
However, Turkey as one of the beneficiaries of the grain deal has not yet spoken out, which is quite crucial, given that the Turks have their own levers of influence on Russia. Probably, the main arguments were stored for the planned meeting with Vladimir Putin this month. Some experts believe that a combination of diplomatic pressure and concessions on sanctions will allow Erdogan to persuade the Russian president to lift the naval blockade of Ukraine and return to cooperation mechanisms, which even in wartime bring profits to all participants of the grain deal.
Meanwhile, Russia is firm on its demands, the list of which was made public back in spring. Among them are the connection of Russian Agricultural Bank to the SWIFT system, the resumption of the Togliatti-Odesa ammonia pipeline’s operation, and the unblocking of foreign assets and accounts of Russian companies involved in the production and transportation of food and fertilizers. In addition, Russians demand the resumption of agricultural machinery’s export to Russia, the cancellation of restrictions on insurance of ships carrying Russian grain, and removing the ban on allowing Russian ships into ports.
While politicians and diplomats search for a suitable solution, sea vessels could in theory sail to Ukrainian ports through the territorial waters of NATO countries – Turkey, Bulgaria and Romania, where Moscow would not risk inspections and blockades. However, given the strikes already carried out on port infrastructure on the Danube, including this night, the Kremlin will try to prevent Kyiv and its partners from resuming exports through the sea corridors without satisfying Moscow’s demands.
To minimize the risks, the United States, together with its allies, tries to help the Ukrainian authorities find some land and sea routes to transport their products. As of today, about 2 million tons of Ukrainian exports, mostly grain, transit Romania every month. After the recent quadrilateral meeting in Galati, Romania promised to double the flow of Ukrainian exports to 4 million tons through modernization and investment in river and rail transport.
According to preliminary estimates, the volume of products that can be exported through the Danube ports, by rail and road, is about 3.3 million tons per month. Thus, if Bucharest launches all the planned capacities, Romania will be able to export in one year as much as was exported through the corridors of the Black Sea Grain Initiative from 2022 to 2023.
Following the refusal of Poland and other neighboring countries to facilitate the transporting of Ukrainian grain, Romania and Moldova have essentially become the only transit states that can fully ensure its export. On the other hand, by creating alternative routes for Kyiv, Bucharest and Chisinau are at risk, given Moscow’s intention to “stall” Ukrainian agricultural exports. By the way, our authorities very unconvincingly cited manmade reasons for the recent derailment of a grain carrier. Although Moldovan railway workers had to re-lay 125 meters of track.
Judging by various signs, including from Moscow, many global players are still interested in the resumption of the grain deal. The absence of any agreement significantly increases the risk of regional destabilization, as Moscow wants to make the most of Ukraine’s export isolation and force the US and the EU to soften their sanctions policy.
Therefore, the main near-term task should be security’s preservation in the Northern Black Sea region and search for a functional export model. Numerous ideas imply various methods, including the option of Russian-Turkish security guarantees. Besides, if we delve into history, the porto franco
concept involving the creation of an extended zone of free economic activity is quite feasible in the current conditions. It could include the Odessa region, as well as certain regions in Moldova and Romania, through which export and logistic routes run.