UN Secretary-General Antonio Guterres has proposed a deal to Russian President Vladimir Putin that would extend the existing agreement allowing grain exports from Ukraine through the Black Sea.
In return, Guterres has suggested reconnecting a subsidiary of the Russian Agricultural Bank to the SWIFT international payment system.
The initial agreement on grain, which was brokered by the UN and Turkey, was officially signed in July last year. Since then, it has been extended three times, with the upcoming deadline set for July 17. However, there have been threats from Russia to terminate the agreement.
Currently, on July 13, the last two ships under the agreement were being loaded with cargo at the Ukrainian port of Odessa.
On July 11, Guterres sent a letter to Putin, presenting a proposal for an extension of the present agreement.
According to a UN spokesman, the primary aim was to address obstacles that hinder financial transactions, a significant concern expressed by Russia. Simultaneously, the proposal aims to ensure the continued uninterrupted transportation of Ukrainian grain through the Black Sea.
“The objective is to remove hurdles affecting financial transactions through the Russian Agricultural Bank, a major concern expressed by the Russian Federation, and simultaneously allow for the continued flow of Ukrainian grain through the Black Sea,” UN spokesman Stephane Dujarric told reporters.
Although Russian exports of food and fertiliser are not affected by the Western sanctions imposed following its invasion of Ukraine, Moscow asserts that limitations on payments, logistics and insurance have effectively created troublesome barriers to such shipments.
Speaking to Brussels Signal, a European Commission spokesperson said: “The Commission’s priority is to ensure that Ukrainian grain can reach the world market. We call on all parties of the Black Sea Grain Initiative to prolong the initiative.
“We are assisting the talks led by the UN and Turkey as required. We are of course open to explore all solutions that contribute to our objective, whilst continuing to ensure that Russia’s ability to wage war in Ukraine is hampered as much as possible.”
In his letter, Guterres emphasised the “crucial significance” of upholding the agreement, highlighting its role in facilitating the global distribution of agricultural and other goods. He also noted that the ongoing deal has played a pivotal role in avoiding a potentially crippling rise in global food prices.
Furthermore, the UN intends to send a high-ranking official to Moscow for negotiations, potentially within this week ending July 14.
The UN proposal comes after a new report by the organisation, published on July 12, revealed that approximately 735 million children and adults suffered from extreme hunger in 2022.
Africa, in particular, faces enormous challenges in this regard and it is that continent which relies most heavily on imports of grain from Ukraine and Russia.
The UN report is a collaboration between five agencies: the Food and Agriculture Organisation (FAO), the International Fund for Agricultural Development (IFAD), UNICEF, the World Food Programme (WFP) and the World Health Organisation (WHO).
Earlier, UN aid chief Martin Griffiths had warned what could happen if the grain deal ended.
“We don’t want to go through this every two months, three months. It’s hugely damaging to commercial confidence. It’s damaging to the impact, ultimately, on food prices. And it’s damaging to the people in the global South whom we deal with who depend on a certain amount of reliability of supply.
“And we are now going through the grain harvesting season, as you know, that’s coming up now. And that will no doubt keep prices somewhat down, but when the harvest comes into the silos and if it doesn’t start moving around the world, the price will spike again. And that has terrible consequences,” he said.
