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Russia is the main beneficiary of the so-called ‘grain agreement’

On July 22, the so-called “grain agreement” was signed in Istanbul between Ukraine, Turkey, and the UN, on the one hand, and Russia, Turkey, and the UN, on the other. According to this agreement, Turkey acts as a guarantor of ensuring the security of the "grain corridor" for the export of grain from three so-called “Big Odesa” Ukrainian ports: Chernomorsky, Yuzhny, and Odesa.

The agreement assumed all parties to the agreement would benefit. Ukraine would be able to export grain. Russia would be able to export its grain and fertilizers, and it would also obtain EU permission to import aircraft parts, including aircraft engines. Turkey would be able to buy grain from Russia and Ukraine at reduced prices and resell it. The UN acts as the "savior" of African countries from hunger, and the EU – from the invasion of a new wave of emigrants.

The Deputy Minister of Infrastructure of Ukraine, Yuriy Vaskov, promised to start shipping grain this week and increase grain exports through these ports in the near future to three million tons per month. It is assumed Ukrainian grain will be exported to traditional markets: China, Egypt, Turkey, and Indonesia.

But the very next morning, Russia fired four rockets at the port of Odesa, two of which were shot down, and two destroyed the pumping station in the port.

Initially, Russia stated, through the mouth of the Turkish Minister of Defense, that it was not involved in this shelling. Then, the press secretary of the Russian Foreign Ministry, Maria Zakharova, and later the Minister of Foreign Affairs, Sergey Lavrov, confirmed the port of Odesa was fired upon by Russian missiles to destroy the Harpoon anti-ship missiles, allegedly based in the port.

At the same time, Lavrov said that this shelling does not contradict the treaty, since there is nothing in it that prevents Russia from destroying military infrastructure in ports. This statement is technically correct, which, on the one hand, testifies to the poor work of the Ukrainian negotiators, and, on the other, once again confirms the saying attributed to the former Chancellor of Prussia, Otto Bismarck, that “any treaty with Russia is not worth the paper on which it is written."

What will happen next?

According to Ukrainian military and political experts, the export of Ukrainian grain will still be carried out. However, there will not be a big benefit, which traders and Ukraine were counting on, as the cost of freight insurance will increase sharply, which, in turn, will not allow the price of grain to rise on the domestic market and receive sufficient profit for its producers.

Thus, Russia became the main beneficiary of this agreement. It managed to ease sanctions, harm Ukraine, and present itself as the savior of African countries from hunger. Turkey's reputation has been damage as a guarantor of the security of Ukrainian grain exports, and the UN has once again demonstrated its impotence and uselessness. Ukraine practically lost.

The most far-sighted grain producers are actively purchasing silo bags, which can store up to 200 tons of grain for up to 7 months. It is assumed that 10-15 million tons can be stored in silo bags in Ukraine.

There are currently approximately 42 million tons of grain storage silos available. According to the latest estimates this year, a harvest of 52 million tons of grain and 13-15 million tons of oilseeds is expected.

So far, grain producers are in no hurry to sell it, and traders are in no hurry to buy it in anticipation of the development of the situation.

About the Author: Iurii Mykhaylov is an agricultural journalist in Ukraine.

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