Over the last 12 months, Russia repeatedly threatened to walk out of the BSGI. For much of 2022, the Kremlin expressed dissatisfaction with how food and fertilizer exports remain affected by the sanctions. Shipping companies, insurers and banks have shied from facilitating Russian trade.
This year, Russia has added further demands, including two that are particularly noteworthy.
Russia is demanding that the State Agricultural Bank (Rosselkhozbank) is exempt from sanctions, insisting that the bank is only engaged in facilitating food production and export. However, Rosselkhozbank’s chairman is Dmitry Patrushev (who also holds the post of the Minister of Agriculture), the son of Nikolai Patrushev, a prominent silovik known to have close ties to President Putin. Reports by the Economist
and Source Material
, an investigative journalism non-profit organization, have established that Rosselkhozbank is also financing an oil trading company and therefore helps buffer Russia’s energy sector from the impact of sanctions.
Russia is also demanding that Ukraine frees up an ammonia pipeline that Russia uses to export fertilizer from Togliatti to global markets via the port of Odesa. Ukraine has blocked the pipeline since February 2022, the beginning of Russia’s invasion. The pipeline was also damaged in an attack
on June 2023, which Russia claims was perpetrated by Ukrainian forces. Russia is a leading exporter of ammonium fertilizer and the Russian Foreign Ministry has called the re-opening of the pipeline a “linchpin” of its demands for a renewal of the grain deal.
In essence, Russia is relying on the naval blockade to eliminate sanctions-related restrictions on its own abundant harvest and resources, allowing it to take advantage of tight global markets for grain and fertilizer. Pivotal role of Turkey for a new Grain deal
Ukraine and the world desperately need a new and lasting grain deal. Of course, Russia wields considerable clout in the negotiations, as its warships can block, or even destroy, grain-carrying commercial vessels. Turkey has played a critical role in bringing Russia to the negotiation table throughout the time the grain corridor agreement has been in operation.
Much of Turkey’s food security
depends on imported wheat from Ukraine and Russia, and Recep Tayyip Erdoğan wants to stabilize grain prices. The same is true of Russia’s trade partners in Africa and the Middle East