Russia suspends participation in landmark Ukraine grain deal

Russia said on Monday that it had halted participation in a landmark UN-brokered deal which allowed Ukrainian grain to be exported through the Black Sea.

The announcement came just hours after Moscow claimed that Ukraine had attacked the Crimean Bridge.

Two people were killed and their daughter was wounded in an action Russia is seeking to cast as a terrorist attack on a major artery for Russian troops fighting in Ukraine.

The Black Sea Grain lnitiative, which provides vital food supplies for millions across the world, has been a precarious operation under increasing threat from Russia as the war in Ukraine continues to go badly for the country.

The initiative, which allows Ukrainian grain and wheat to be exported from the country, was brokered between Russia, Ukraine and Turkey with the International Maritime Organisation also involved. It sees officials from both warring nations sitting in a control centre in Turkey ensuring that the vessels that are transiting the corridor are only exporting foodstuffs.

London market insurers have also stepped in to provide specific insurance coverage for the vessels involved; the Ascot-led facility, first revealed by Emerging Risks, is placed by Marsh.

The Kremlin said the halting of the agreement, brokered by the United Nations and Turkey to combat a global food crisis worsened by Russia’s invasion of its neighbour, had nothing to do with the bridge attack.

Kremlin spokesman Dmitry Peskov said the parts of the Black Sea grain deal package relating to Russia were not fulfilled and therefore it was ceasing effect. The deal, he said, had ceased to be valid and was halted. Russia, he said, would return to the deal once the conditions relating to Russia were fulfilled.

The Ukrainian military suggested the attack could be some kind of provocation by Russia itself but Ukrainian media cited unidentified sources as saying that Ukraine’s Security Service was behind the incident.

Martin Devenish, director and head of Corporate Intelligence, S-RM, commented “The end of the Black Sea grain deal is no real surprise. Russia has been threatening to walk away for months, with Putin stating on Russian television as recently as last Thursday that ‘enough is enough’. Questions will be asked about how much of this Russian posturing was simply brinksmanship and whether the UN could have offered any further concessions on fertiliser and food exports to bring Moscow back to the table.”

“The failure to renew the deal now places the Global South in a precarious position, with a very real threat that current famines could worsen and spread. There is some hope that the mooted $500m guarantee fund, currently under development by Ukraine, could act as ‘state insurance’ for shipping in the region, but this is still untested.”