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Crisis Group Response to IGAD Charge
Crisis Group Response to IGAD Charge
Who are the Winners in the Black Sea Grain Deal?
Who are the Winners in the Black Sea Grain Deal?
Statement / Africa

Crisis Group Response to IGAD Charge

The International Crisis Group regrets the charge by the Intergovernmental Authority on Development's Council of Ministers of Foreign Affairs at its meeting of 18 March 2005, that our position and advice has "resulted in damages to the region and to the peace process in Somalia".

The International Crisis Group has long worked closely with the Intergovernmental Authority on Development (IGAD) and its member states. The IGAD-led peace process for Sudan and the peace process in Northern Uganda are just two of the cases in which Crisis Group analysis and expertise have been made available to IGAD members in pursuit of peace, security and development of the region. Crisis Group has also welcomed and supported IGAD's engagement in the Somali peace process since its inception in October 2002.

Crisis Group continues, however, to draw attention to the deep divisions among the Somali people over the issue of deployment of foreign peacekeeping troops, especially from the neighbouring "Frontline States" of Djibouti, Ethiopia and Kenya. These divisions are manifest in the many public demonstrations throughout Somalia in recent weeks, the statements of Somali political leaders and civil society organisations, and reports and commentary in the Somali media. The unfortunate and indecorous scenes of violence in the Somali Transitional Federal Parliament on 17 March 2005 provided ample evidence of a house and a nation divided.

In public statements and letters to concerned heads of state, governments and intergovernmental organisations, Crisis Group had consistently argued that this issue must be handled with great sensitivity if it is not to destabilise Somalia's transitional institutions and threaten the peace process. We are particularly concerned that any decisions concerning peacekeeping forces and the related issue of an interim seat of government, be reached through thorough, transparent consultation with the parties concerned and receive the unambiguous approval of the Somali Transitional Federal Parliament. The IGAD governments are aware that Crisis Group's concerns in this regard are shared by the members of the IGAD Partners Forum. A statement from the President of the United Nations Security Council on 7 March also affirmed that such a mission "would require the support of the Somali people".

Crisis Group welcomes the commitment of IGAD and its members to peace in Somalia and congratulates them on having guided the peace process so far. We urge them to give due attention to the concerns we have raised in order that this opportunity to restore peace and positive governance to Somalia not be missed, and that they continue in their efforts to assist the Somali people and their leaders to find consensus on the best way forward. We look forward to the opportunity to exchange views with the IGAD member states on this and other issues.

A view shows silos of grain from Odesa Black Sea port, before a shipment of grain as the government of Ukraine awaits signal from UN and Turkey to start grain shipments, amid Russia's invasion of Ukraine, in Odesa, Ukraine July 29, 2022. REUTERS/Nacho Doce

Who are the Winners in the Black Sea Grain Deal?

Months of diplomacy have yielded a set of agreements allowing Ukraine to export grain via the Black Sea. In this Q&A, Crisis Group experts assess gains from the accord, which could be significant even if it does not by itself push down global food prices.

What is the significance of the Black Sea grain deal?

In the morning of 1 August, the Sierra Leone-flagged cargo vessel Razoni departed the Ukrainian port of Odesa carrying 26,000 tonnes of corn to Tripoli, Lebanon. It was the first grain to ship out of the port as a result of a deal agreed to by Russia and Ukraine on 22 July in Istanbul. The deal (brokered by the UN and Türkiye and signed separately with the two countries) establishes a shipping corridor for Ukrainian grain via the Black Sea. Ensuring that it holds will be on the agenda for Turkish President Recep Tayyip Erdoğan’s 5 August meeting with Russian President Vladimir Putin in Sochi, the first visit to Russia by a North Atlantic Treaty Organization (NATO) member state leader since Russia’s invasion of Ukraine. If it does stick, the deal will let more food reach markets around the world and serve as an important precedent for finding ways to mitigate the effects of the full-fledged war that Russia launched upon its neighbour in February.

The deal comprises parallel agreements signed by Russian and Ukrainian officials in Istanbul. These set out terms for Ukraine to export grain and other agricultural products from its Black Sea ports of Odesa, Chornomorsk and Yuzhne, despite Russia’s continuing wartime blockade. They were the culmination of months of diplomacy led by the UN and Türkiye. A Russian missile attack on Odesa’s port on 23 July raised questions about whether Moscow had signed in good faith. But Ukrainian officials nevertheless pressed ahead with plans to start shipping grain out of the country. When the Razoni sailed, the Ukrainian Port Authority said other ships in the three ports had loaded 480,000 more tonnes of grain, corn and vegetable oil, ready to go.

Ukraine’s partners have welcomed the fragile agreement for a number of reasons. First, it offers Kyiv a chance to raise revenue during a period of acute war-induced economic turmoil. Secondly, Ukrainian grain may now reach countries in Africa and the Middle East that are struggling with the international food price crisis. Thirdly, the successful UN and Turkish mediation of the deal was a rare flicker of hope for diplomacy in the Russo-Ukrainian war at a time when neither Moscow nor Kyiv seems willing to enter into broader peace negotiations.

Not surprisingly, the view from Moscow is different. Russia has emphasised that – as its 23 July missile strike indicated – it does not intend to let the grain deal impede its overall prosecution of the war in Ukraine. Russian officials are, however, pleased that the UN signed a side deal with Moscow, committing to support Russia’s efforts to export its own food and fertiliser exports as quid pro quo for easing the blockade. From the Kremlin’s perspective, this package of deals was a victory in its campaign to blunt the impact of Western sanctions on the Russian economy.

While it is not clear if the grain deals will work in practice, it is also disputable who has gained most from the agreements. Russia, Ukraine, Türkiye and the UN all have good reasons to be satisfied with what they got in Istanbul – although an economic assessment suggests that the deal’s effects on global food prices will be limited.

What did Russia and Ukraine agree to?

The possibility of a Russian-Ukrainian compromise on food exports via the Black Sea appears to have been under discussion at the UN as early as March. Secretary-General António Guterres noted after the Istanbul ceremonies marking the deal that he had flagged the idea of an agreement when he visited Ankara, Moscow and Kyiv in April. The UN and Türkiye collaborated closely on developing plans for the agreement, with cautious support from the United States and European Union (EU), in the months that followed. Senior UN officials were upbeat about the chances of success by May, but a series of complications – including a dispute between Moscow and Kyiv about whether Ukraine should demine its waters to let convoys pass more quickly – slowed down the process and threatened to scuttle it entirely.

Russia ... does not intend to let the grain deal impede its overall prosecution of the war in Ukraine.

The final agreements on the “Black Sea initiative” completed in Istanbul are complicated. Ukraine and Russia did not sign a single accord – a political impossibility given the hostilities – but their representatives instead inked two parallel documents outlining mechanisms for grain exports. According to these documents, Ukrainian pilots will be responsible for guiding commercial vessels carrying grain and other cereals and foodstuffs from the ports of Odesa, Chornomorsk and Yuzhne out of Ukrainian waters, which will remain mined to deter Russian amphibious operations. A Joint Control Centre staffed by personnel from Türkiye, Russia, Ukraine and the UN has been set up in Istanbul to monitor the movement of cargo vessels involved in the program. UN, Turkish, Ukrainian and Russian officials are inspecting ships at both ends of the route to make sure they are not carrying weapons. If they hold, these arrangements could allow some of the 22 million tonnes of Ukrainian grain reportedly trapped inside the country to reach global markets.

Negotiators also had to grapple with the difficulty of insuring commercial vessels transiting the Black Sea in wartime conditions. Insurance companies have doubled premiums for marine business affected by the war since February. Western diplomats worried that the 23 July missile attack on Odesa would further spook insurers. The solution is a special “marine cargo and war facility” set up at the Lloyd’s insurance exchange in London to cover these vessels. UN and UK officials have expressed confidence that this facility will be a robust source of financing. Ukraine’s Infrastructure Minister Oleksandr Kubrakov has also signalled his intention to meet with the World Bank and the European Bank for Reconstruction and Development to seek ways for them to support insurance mechanisms that could help reactivate the Black Sea as a trade corridor.

What was in Russia’s side deal with the UN?

In addition to its version of the bargain on Black Sea shipments, Russia signed a memorandum of understanding with the UN Secretariat on “promoting Russian food products and fertilisers to the world markets”. From early in the talks, UN officials understood that it would be necessary to offer Russia ways to more easily export its own agricultural products which – although not specifically subject to Western sanctions – have been impeded by U.S. and EU measures against Russian banks, trucks and vessels as well as by the refusal of many international shipping companies to work with Russian clients.

The memorandum has not yet been published. According to Russian Foreign Minister Sergey Lavrov, its main goal is “to ensure transparent and unhindered shipments of Russian food and fertilisers, including the raw materials for their production, to international markets” by removing financial, insurance-related and logistical obstacles resulting, in the Russian narrative, from Western policies. It is valid for three years, unlike the grain deal, which must be renewed every 120 days by agreement of Kyiv and Moscow.

Crisis Group understands from sources informed about the memorandum’s contents that it does not guarantee that Western powers will drop measures complicating Russian exports, however. Rather, Moscow will inform the UN Secretariat of the impediments to Russian food and fertiliser exports. The Secretariat has committed to continue efforts to facilitate the flow of food and fertilisers from Russia to world markets, and to engage relevant authorities and the private sector to exempt Russian food and fertilisers from restrictive measures. While the UN cannot compel other states to cease these measures, the commitment to use its diplomatic capabilities in this case is significant. The memorandum does not spell out what will happen if Russia is unsatisfied with the UN’s progress, but there is an implicit understanding that Moscow could feel less committed to the Black Sea deal if its own exports do not get to market.

What is in this deal for Ukraine?

The benefits of the Black Sea agreements for Ukraine are straightforward. The grain deal is a chance to shore up the Ukrainian economy after the damage the invasion has caused. The World Bank has predicted that the Ukrainian economy will contract by 45 per cent in 2022, and Kyiv has upped its defence budget more than tenfold since the invasion started. On 25 July, President Volodymyr Zelenskyy’s office said the budget deficit for 2022 could reach $50 billion, and in June, tax revenue covered only 20 per cent of the state’s expenses. Exporting more foodstuffs could soften the economic blow. Before the invasion, more than 10 per cent of the country’s GDP – and 40 per cent of all Ukrainian exports – came from agriculture. Moreover, a grain glut depressing domestic prices does the weak economy no favours. Kyiv has thus made grain exports a priority. On 1 July, the cabinet lowered licencing requirements for the grain trade, opening the market to new participants.

Ukraine also counts on the deal to help it strengthen relations with countries in the Global South that depend on food grown in the Black Sea region. Both the Ukrainian and the Russian governments have tried to woo African leaders into subscribing to their respective versions of who caused the food crisis. Ukrainian politicians hope that renewing grain exports will bolster their global support.

The deal comes at a crucial time. Large amounts of grain sitting in silos need to be shipped so as to free up storage space for the summer harvest. Most of Ukraine’s grain grows in the black soil of the country’s south and east, the regions most affected by the war. The three ports that would profit from the deal are among the Odesa region’s economic engines. Getting them running again despite continued Russian attacks would provide urgently needed jobs to a region under fire.

The grain deal is a chance to shore up the Ukrainian economy after the damage the invasion has caused.

To ease the chokehold on its sea ports, Ukraine also explored alternative routes. But grain transported by land, although now ten times the pre-war volume, has to get past numerous physical obstacles. The gauge of train tracks in post-Soviet states like Ukraine is 92mm wider than in the European Union. For transshipment, Ukraine therefore needs large marshalling yards near border crossings where trains can make long stops to offload their freight. When it comes to shipping by road, many Ukrainian trucks do not meet neighbouring states’ ecological standards, even after easing to facilitate trade. As a result, Ukraine’s exporters can move no more than 1 million tonnes of grain per month by land, a fifth of what they could ship out via the Black Sea.

Barges on the Danube, which runs along some 120km of Ukraine’s south-western border, can also transport grain to terminals in Central Europe or to the Romanian Black Sea port of Constanta. But only two of Ukraine’s Danube ports, Izmail and Reni, are connected to its rail network. Moreover, the old and winding track runs over a strategically important bridge near Odesa that Russian missiles have targeted throughout the spring and summer. Roads are safer, but narrow: trucking grain toward the Danube has led to large traffic jams and ships waiting idly for their loads in the channels of the river delta.

What is in the deal for Russia?

Moscow has stressed the significance of its confidential memorandum of understanding with the UN, rather than the Black Sea initiative itself. The emphasis fits with its narrative that the real source of global food price rises is the Western sanctions on Russia – which the UN will now supposedly encourage governments to ensure do not undermine food exports – rather than its own blockade on Ukrainian grain. From the war’s onset, Russian officials have downplayed the problem of Ukrainian grain exports, as well as the contribution of Ukrainian exports to global food security, while exaggerating the impact of sanctions imposed on Russia on rising global food prices. President Putin has claimed that Ukrainian grain accounts for only 0.5 per cent of the world’s food. Lavrov is now spinning the same tale, describing the UN-Russian memorandum about facilitating Russian food exports as proof of the “absolutely artificial nature of the West’s attempts to shift the blame for the problems in supplying grain to international markets on Russia”.

Like Ukraine, Russia has kept its eye on global public opinion about food prices. Moscow has long sought to cast itself as a friend of former Western colonies in Africa, while framing the war in Ukraine as a response to Western colonial expansion. The grain deal was concluded as Lavrov got ready to depart the next day for a major African tour. On 21 July, Putin also signed a decree to prepare for a second Russia-Africa summit, to be held in Russia in 2023, and for other events in the Russia-Africa format. Food security is expected to be a main topic on the summit’s agenda. The publicity value of the deal may, however, be overrated. Crisis Group has not observed extensive in-depth coverage of the Black Sea initiative in notable African media markets (including Egypt, Kenya and South Africa), although some of the region’s leaders, including the presidents of South Africa and Côte d’Ivoire, have warmly welcomed it.

The Russian leadership portrays the deal as a sign that Western sanctions policy is weak and proof that its own approach is sound. The Kremlin wants Western states to end their support for Ukraine to enable Russian military victory and lasting influence over Kyiv. Even short of that, it is counting on Western dependence on Russian exports to force Ukraine’s backers to lift sanctions. While they have not lifted sanctions, the U.S. and EU did adapt a number of restrictions on Russia on the eve of the deal, most related to ensuring that food and agricultural exports, which are not sanctioned, are not harmed by sanctions’ secondary effects. On 14 July, the U.S. Treasury Department issued a broad general licence to authorise certain transactions related to foodstuffs, agricultural equipment, medicine and medical devices. Five days later, the EU decided to allow its member states to unfreeze relevant assets of some sanctioned Russian banks “after having determined that such funds or economic resources are necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilisers”. Notably, the most recent round of EU sanctions, announced on 20 July, froze the assets of Russia’s largest bank, Sberbank, but specifically exempted funds needed for the food trade.

As a result, some Russian banks will be able to use those of their assets frozen in the EU that are related to food or fertiliser transactions. Russian agricultural producers, which have accounts at these banks, are now assured that their assets will not be frozen and will be available for trade with third countries. Russia’s grain market especially is dominated by large agricultural holdings closely connected with state authorities. Thus, although these actions are narrowly focused on agricultural products, they may also unfreeze some of the assets of banks linked to Putin’s inner circle and the Russian military-industrial complex.

If international buyers conclude that Russian food and fertilisers will be unaffected by sanctions, Moscow (and those agricultural holdings) will have an easier time selling what they expect to be a record harvest at a large profit on the international market. According to Putin, the grain harvest in 2022 will amount to 130 million tonnes, including 87 million tonnes of wheat.

Will the Black Sea initiative significantly affect Russian military operations?

As evidenced by the 23 July missile strike on Odesa, the Black Sea initiative does not mean the end of fighting in Ukraine, and it has not made comprehensive peace talks more likely. Lavrov confirmed that Russia has made no commitment that would hinder its continued military action in Ukraine. Moreover, by striking Odesa, Russia underlined that it intends to continue hitting Ukrainian military infrastructure even in the ports covered by the deal. The deal protects only port infrastructure directly linked to food exports from attack – and it is up to the parties to decide which is which. Even if Russia broadly abides by the deal, it is likely that some missiles will accidentally hit non-military sites. Nor does the agreement bind Russia to stop targeting grain storage facilities elsewhere in Ukraine or to cease burning Ukrainian wheat fields.

Indeed, Ukraine accuses Russia of deliberately killing Oleksiy Vadatursky, the owner of the Ukrainian agricultural company Nibulon, and his wife in a 31 July strike in the Mykolayiv region, north east of Odesa. Nibulon is Ukraine’s third largest agricultural company by revenue, and Vadatursky had been planning to visit Türkiye to discuss his participation in the grain deal.

What does Türkiye gain from the deal?

Turkish commentators and officials hailed the grain corridor deal as a diplomatic victory. Since the Russian invasion, Türkiye has delicately balanced its relations with the two countries and sought to mediate between them. It has supported Ukraine, including with weapons, and, early in the war, closed the Turkish Straits to Russian military vessels not based in the Black Sea. But it has not joined in Western sanctions against Russia, and it has allowed Russian military and civilian planes to traverse its airspace. Back in March, after intense diplomacy by Ankara, Türkiye hosted Russian and Ukrainian delegations in Antalya (10 March) and Istanbul (29 March) for ceasefire talks, though neither round succeeded. Now, however, Ankara’s leading role alongside the UN in the grain talks has borne fruit. A meeting between Erdoğan and Putin in Tehran on 19 July appears to have been critical in bringing about the deal three days later.

“We take justified pride in paving the way for this initiative which will play a significant role in addressing the global food crisis”, Erdoğan said in a speech at the deal’s signing ceremony. The agreement also bolsters Ankara’s credentials as a global problem solver and, officials hope, burnishes its image abroad. Fahrettin Altun, the Turkish presidency’s communications director, wrote on Twitter the same day: “Today’s deal shows that the international community can work with us to overcome numerous, immense challenges facing humanity”.

Turkish officials also hope the deal may eventually help facilitate a ceasefire, or better, an end to the war in Ukraine. “I hope the step we are taking today … will be a new turning point in rejuvenating prospects for peace”, Erdoğan said in his speech. Türkiye worries that a lengthy war between its two important trade partners and fellow Black Sea littoral states will be hazardous to its own economy and security. Officials in Ankara, including Erdoğan himself, frequently say they will continue to engage diplomatically to try to stop the fighting.

The Black Sea initiative may not have a major long-term effect on global food prices.

Ankara surely also hopes the deal makes it look good to domestic audiences in the lead-up to parliamentary and presidential elections now scheduled for June 2023. Turkish mainstream media widely covered positive reactions from around the globe to the role that Türkiye played, especially from its Western partners but also from countries particularly hurt by the food crisis, including Pakistan and a number of African nations. Turkish opposition parties have remained largely silent on the grain corridor deal, but some of Erdoğan’s opponents openly worry that he may gain support by portraying himself as a broker of vital international deals. Others postulate that success stories in Turkish foreign policy can help Erdoğan divert public attention from economic troubles and other domestic problems (official figures now show annual inflation at nearly 80 per cent).

Representatives of the Turkish agricultural industry would like to see the grain corridor deal mitigate harm done to the sector by recent years’ drastic foreign currency increases and surging prices. Some hope the corridor will restore Türkiye’s own access to Ukrainian and Russian grain crucial to its own needs and to its flour exports. (In 2021, Türkiye was the world’s top wheat flour exporter.) Ideally, it will also slow down skyrocketing food cost inflation in the country. In the long run, some believe the deal might even increase Istanbul’s strategic importance as a grain export hub. Such expectations may or may not be realistic, but they may well play into Ankara’s thinking.

What does the deal mean for UN engagement in the Ukraine war?

UN Secretary-General Guterres described the grain deal as “probably the most important” achievement of his tenure at the organisation to date. Guterres and some of his senior advisers – including Under-Secretary-General for Humanitarian Affairs Martin Griffiths and Secretary-General of the UN Conference on Trade and Development Rebecca Grynspan – worked extremely hard on the agreement in conjunction with advisers from the Centre for Humanitarian Dialogue, a mediation NGO, as well as UN agencies. Guterres, who faced criticism from former UN officials in the war’s first months for assuming a low diplomatic profile, is said by observers to have taken a close personal interest in the technical details of issues such as demining and insurance.

The success of negotiations does not, however, necessarily mean that the UN is well placed to mediate a political solution to the war. Russia has previously blocked the Security Council from endorsing the Secretary-General’s “good offices” (UN parlance for peace diplomacy) over Ukraine. While Mexico and Norway tabled a draft Security Council presidential statement welcoming the Black Sea initiative, they withdrew it when they could not get the necessary consensus on a text. Russia had wanted to include a positive reference to its memorandum of understanding with the UN. The U.S. objected to the Council praising a document that was not yet in the public domain. Press reports suggest that Russia rejected Western suggestions that the Council reference a statement by Guterres condemning the 23 July missile strike on Odesa. Under-Secretary-General Griffiths told journalists that a Council statement would have been “nice”, but that UN officials had expected that it would be hard to secure.

Naturally, UN officials say they hope that the initiative is a step toward peace, but they remain doubtful that hostilities will end or even pause any time soon. For the time being, the UN’s main role in the war is likely to continue to be in mediating humanitarian compromises to mitigate its effects – as over grain – rather than a peace deal.

What impact will the grain deal have on global food prices and attitudes toward the war?

Notwithstanding the benefits it promises, the Black Sea initiative may not have a major long-term effect on global food prices. International prices of almost all commodities that Ukraine exports, particularly wheat and corn, are almost back to pre-war levels. The reason is that markets are already pricing in a looming recession: expectations that demand for commodities will decrease in the coming months are depressing prices. But the initiative will, if fulfilled, at least make it easier for Ukraine to supply grain to nearby markets, so that countries like Türkiye, Lebanon and Egypt can buy more and cheaper grain than in previous months (although Egypt is reportedly refusing to accept a shipment from Ukraine pending a new contract). The deal may push prices down a little further since it reduces uncertainty in the commodity markets, and also offers evidence that Russia and the West may make political arrangements through intermediaries – such as the UN – even as the war grinds on. Lower prices, however, may create incentives in other countries to hoard food while it is cheap.

Spot prices on grain in international markets did fall after the Black Sea initiative was confirmed, but the decline was offset by an increase the following week after the Russian missile strike on Odesa. While the rapid changes say little about the grain deal itself, they suggest that grain and commodity markets will remain volatile and traders cautious about export orders for Ukrainian grain. High transport costs and existing risks will continue to push exporters to diversify their grain supply, as they have been doing since the war broke out. As other countries such as Romania take Ukraine’s place in grain markets, Ukraine will continue to lose market share (at least in the short run) even if the Black Sea initiative is a success on its own terms.

As for attitudes toward the war, and its relationship to the months-long spike in global food prices, there is no clear sign yet that either Russia or Ukraine has won sceptics over to its point of view following the grain deal. Frustration with price volatility and food shortages has been particularly marked in many African countries, where people resent that they are experiencing hardship due to a European war. Coverage of the deal in African media has been largely straightforward. Lavrov was greeted lavishly on his tour, but nothing suggests that he has convinced African states of Russia’s narrative. Nor, however, is there much evidence of the Ukrainian – and Western – version of events gaining ground. The grain deal, although a triumph for diplomacy and a win for Russia, Türkiye, Ukraine and the UN, is not a game-changer for either the future of the war itself or for how the rest of the world sees it.

Contributors

Senior Analyst, Russia
OlegIgnatov18
Senior Analyst, Ukraine
Simon_Schlegel_
Senior Analyst, Türkiye
BerkayMANDIRACI
Postdoctoral Fellow on the Future of Conflict
raffa_ch
UN Director
RichardGowan1
Program Director, Europe and Central Asia
OlyaOliker
Deputy Program Director, Europe and Central Asia
AdeCar