Ukrainian Grain Crisis in Full Swing

Over the past 12 months, the financial losses of Russian agricultural producers are estimated at $1.2 billion, and of chemical fertilizer producers at $1.6 billion.


Russia will be able to rejoin the agreement on Ukrainian wheat only if all obstacles to Russian agro-industrial exports are removed. Meanwhile, Japan increased its direct grain imports from Russia by more than five times.

Starting today, all ships bound for Odessa or other Ukrainian ports will be considered by Russia as “military transports with weapons and ammunition,” and the countries whose flag these ships fly will be considered by Russia as “directly participating in the armed conflict in Ukraine.” This was announced by the Russian Ministry of Defense after the deal on Ukrainian wheat signed in 2022 between Russia, Ukraine, Turkey, and the UN was terminated on July 17.

While the West accuses Russia of exacerbating the food crisis in the world and threatens with “severe diplomatic consequences and more,” Moscow promised to supply its grain on an “absolutely free” basis to the neediest countries, primarily in African. The proposal will be implemented at the Russia-Africa summit in St. Petersburg next week.

Meanwhile, Russian President Vladimir Putin reaffirmed his willingness to return to the grain agreement if the obstacles to Russian agricultural exports are removed. “Russia could reconsider the possibility of joining the wheat deal, if all the obstacles placed by the West to Russian exports of food and chemical fertilizers were smoothed out, not in words but in deeds,” Putin said.

Primarily, all Russian banks involved in the field of financial services for the export of food and fertilizers should be immediately reconnected to the Swift interbank telecommunications system,” – stressed the head of the Kremlin. In addition, Moscow asks to unblock the sale of spare parts for imported agricultural machinery to Russia.

Putin estimated the loss of Russian agricultural producers over the past 12 months due to Western sanctions at $1.2 billion, and chemical fertilizer producers at $1.6 billion. According to Putin, the West is “obstructing the free transfer” of Russian grain to developing countries. “Of the 262 thousand tons of Russian grain blocked in European ports, we have so far managed to organize the dispatch of only two ships to the poorest countries,” said the Russian president, stressing that “Moscow has nothing against the wheat deal as such, but wants all of its clauses to be upheld.”

In the year of the deal, China managed to import more than 30% of Ukrainian grain. But even the “leading countries” of the anti-Russian bloc did not hesitate to take advantage of 30-40% discounts on Russian cereals, which exporters are forced to use in order to be able to sell at least part of the giant grain harvest that in the 2022 season amounted to more than 153 million tons (of which 104 million tons are wheat), and forecasts for 2023 estimate 123 million tons.

According to the latest data from the Japanese Ministry of Finance that also maintains foreign trade statistics, over the past six months, Tokyo increased grain imports from Russia by more than five times, compared to the same period a year earlier.