The Granular Details of the Grain Deal
The freshly signed agreement that will allow Ukrainian grain and Russian fertilizer exports to continue their normal shipping patterns will be a major relief for a food supply chain that has been under acute stress the last several months. Ukraine is one of the largest grain exporters in the world and Russia’s fertilizer exports are equally as important for the agricultural industry. However, reaching a deal required more than just Russia and Ukraine: Turkey and the U.N. served as mediators and played an integral role in ushering in an agreement that pleased all sides. What does this deal mean for all the various players involved?
Ukraine provides about 10% of the world’s wheat exports and almost half of the world’s sunflower oil. Before the war Ukraine’s agricultural sector accounted for 11% of the country’s GDP. Furthermore, agriculture comprised nearly 20% of the labor force, and almost 40% of the country’s total exports. The blockade Russia imposed on Ukraine’s exports placed further stress on farmers that already have had to navigate harvesting crops in a war zone. In Kyiv, leaders did not celebrate the deal as a major win. Both President Zelenskyy and Foreign Minister Kuleba expressed skepticism that Russia will honor the deal. Russia’s bombing of Odesa on Saturday proved their doubts right. However, the fact that Kyiv officials were willing to negotiate could signal that future negotiations are possible.
Similar to Ukraine, Russia’s willingness to compromise hints that further conversations between the warring sides could stabilize components of the global economy. While Russia has been hit hard with sanctions, it seems that its leaders have still been able to fund their war efforts through energy exports. With fertilizer now being added to the list of items they can export, sanctions could play a diminishing role in countering Russia’s invasion. For the talks themselves, Turkish leaders have shown they are not willing to play a subservient role to Russia. This week President Erdogan forced President Putin to wait alone for nearly a minute before a planned photo-op. In the videos released, you can see Putin fidgeting trying to act normal as he awkwardly waited. While the moment can be interpreted in many ways, it could signal that Russia’s fear and clout has waned with some global leaders.
Turkey has continued to play a large role in the negotiations between Russia and Ukraine. The first talks between the two sides took place in Istanbul. Despite at times playing the neutral party, Turkey has helped to supply Ukraine with war materials. After a fundraising campaign to supply the Ukrainian army with Turkish drones went viral, the Turkish defense company decided to donate an additional drone to the cause. The company’s CEO went a step further, vowing to never supply drones to Russia. If Ukrainian grain can be successfully exported under the deal, then Turkey could further cement its role as an international mediator. Erdogan has strategically placed his country at the center of peace deals between the two sides, making him an indispensable player in ending the war.
The big winner of these talks could be the rest of the world. Global food prices have risen by 23% since last year. Many countries in western and sub-Saharan Africa, which are more reliant on Ukrainian grain and Russian fertilizer, have been hit especially hard by the lack of access to these exports. The deal will be a welcome relief if it can survive the ever-evolving conflict.