The Food War, the Grain Deal, and the Real Deal

Yves here. It’s easy to get sucked into focusing on the kinetic war in Ukraine and therefore missing other aspects of the conflict that are also important, particularly in Putin’s long-standing campaign to advance a multipolar world order.

The media and commentators have only intermittently focused on the misnamed Ukraine grain deal. As John Helmer reminds us below, freeing up blocked Russian fertilizer was structured as integral to that agreement, but the West has tried to bury that fact to help shirk that commitment.

A wee problem with that is that while the Global South regards Ukraine as not their problem, the Collective West has made it their problem by how it has handled this pact. First, because Russia has a bumper grain harvest last year, Ukraine grain is not quite as critical to world supplies as the media would have you believe. Second, there is a global fertilizer shortage, so continuing to interfere with Russia deliveries would very much be notices in poorer parts of the world. So the handling of this dispute is only increasing the advanced economy/Global South split.

Helmer also provides a great deal of gory detail about how blatantly partisan UN Secretary General, Antonio Guterres, has been.

By John Helmer, the longest continuously serving foreign correspondent in Russia, and the only western journalist to direct his own bureau independent of single national or commercial ties. Helmer has also been a professor of political science, and an advisor to government heads in Greece, the United States, and Asia. He is the first and only member of a US presidential administration (Jimmy Carter) to establish himself in Russia. Originally published at Dances with Bears

The longest lasting of the false-flag operations conducted against Russia since the Special Military Operation started in February 2022 has been flying the flag of the United Nations (UN).

The chief flag-bearer has been the Secretary-General of the UN, Antonio Guterres, a Portuguese (lead image, left); he has manipulated, plotted, and lied his way through the Ukrainian hostage-taking at Azovstal, during the Battle of Mariupol;  the Ukrainian attacks on the Zaporozhye Nuclear Power Plant; and Ukrainian attempts to break the ports blockade with what the UN has been calling its “Black Sea Grain Initiative”.

Reinforcing Guterres in these schemes of deceit have been his spokesman, American and Frenchman Stéphane Dujarric (Rothschild),  Argentine Rafael Grossi, director-general of the International Atomic Energy Agency (IAEA);  and the negotiator of the Black Sea Grain Initiative, British lawyer Martin Griffiths (lead image, right)  and https://twitter.com/. Griffiths came to his UN job from a Geneva organization funded by the anti-Russian governments of Norway, Sweden, Germany, the Netherlands, Canada, Denmark, the UK, Australia, Ireland, and Switzerland. It calls itself “The Centre for Humanitarian Dialogue”.

Guterres’s bluff was called a year ago, on April 26, at the long-table incident in Moscow when President Vladimir Putin told Guterres he was wrong on the facts, biased in his public statements, and acting in violation of his UN authority.

“You can call it whatever name you like and have whatever bias in favour of those who did it, “ Putin told Guterres after getting him to confirm that the earphone to his interpreter was working. “But this was really an anti-constitutional coup. Unfortunately, our colleagues in the West preferred to ignore all this. After we recognised the independence of these states [Donetsk and Lugansk People’s Republics], they asked us to render them military aid because they were subjected to military actions, an armed aggression. In accordance with Article 51 of the UN Charter, Chapter VII, we were forced to do this by launching a special military operation…[About the Battle of Mariupol and the Azovstal hostages] Mr Secretary-General, you have been misled…The simplest thing for military personnel or members of the nationalist battalions is to release the civilians. It is a crime to keep civilians, if there are any there, as human shields.”

Putin did not shake hands to greet Guterres; he placed him further away than any head of state had ever been seated in conversation at the Kremlin before; Guterres squirmed.  To CNN a day later in Kiev, Guterres lied about what had been said at the meeting.   Later, when asked in New York to say what and when he knew of the foreign combatants at Azovstal, and the use of civilian hostage shields in the battle, Guterres refused to answer.

The Russian Foreign Ministry has been more explicit in its condemnation of Guterres than of any UN secretary-general before him. “Contrary to the requirements in the UN Charter,” the Foreign Ministry spokesman declared last July, “the [Guterres’ staff] Secretariat is not taking an equidistant position, as one would expect from a Secretariat of the most authoritative international organisation that is designed, among other things, to promote the settlement of disputes.”

“I would like to remind our esteemed colleagues from the UN Secretariat”, according to Maria Zakharova at the ministry, “that their job is not to take sides in situations of dispute, but to help maintain peace and stability. This is what they are paid for and this is their mandate.”

On September 29, the Foreign Ministry announced: “The relevant functions do not give the Managing Director [Guterres] of the UN Secretariat the right to make biased political statements on behalf of the entire [UN] Organization. Nor is such a person authorized to interpret the norms of the Charter and documents of the General Assembly, including the 1970 Declaration on Principles of International Law concerning Friendly Relations and Cooperation between States in Accordance with the UN Charter… Obviously, A[ntonio] Guterres has not only exceeded his authority, but actually taken sides with the collective West, again resorting to a selective approach in the interpretation of the unfolding events.”

“We consider unacceptable the fact that the UN Secretary-General has become an instrument of propaganda and pressure on Member States at a time when he should be guided by the UN Charter in its entirety.”

The defeat of the Ukrainian and NATO forces on the battlefield has gradually diminished the value to the US and NATO of the role of the UN Security Council and of Secretary-General Guterres. This has left Grossi exposed as playing the role of spokesman for Kiev when war operations caused the biggest radiation release so far into the atmosphere on May 13 as   Ukrainian army stocks of depleted uranium shells were blown up at Khmelnitsky.

In the war over food stocks – the attempt to stop Russia exporting grain and crop fertilizers, and to use Ukrainian grain exports to recover Black Sea ports and to conceal attacks on Russian targets  – the role of Griffiths as the UN go-between has failed comprehensively, and for the same reason that Guterres and Grossi have failed. Griffiths told the UN on May 23 that the Ukraine is the victim of Russian attacks based on Kiev press releases. “The biggest challenge remains the impediments to reaching all areas in Donetsk, Luhansk, Kherson and Zaporizhzhia currently under the military control of the Russian Federation.”

Griffiths also claimed that “in recent weeks, we have engaged in intensive discussions with the parties to the Black Sea Initiative, to secure agreement on its extension and the improvements needed for it to operate effectively and predictably. This will continue over the coming days.”

In fact, Griffiths and UN officials cannot “engage” with the Russian side because they are no longer trusted. Griffiths’ claim that he and his staff have “continued to deliver a wide range of support with concrete results under the Memorandum of Understanding on the facilitation of Russian food and fertilizer exports” is false.

The Russian response is that Grossi and Griffiths have been following “illegal instructions to his subordinates” from Guterres.

The Russian government has repeatedly accused the UN and the Ukrainians of refusing to honour the reciprocal export provisions of the food export initiative, so that Russian grain and fertilizers will not be blocked in the European ports,  or at sea where vessels carrying the Russian cargoes have been denied Anglo-American insurance. The UN publications, statements and press releases published by Guterres’s staff have reported the full 26-paragraph text of the grain agreement;   they have omitted the text of the fertilizer agreement.  The combination of the two makes the difference between the grain deal and the real deal:  for the Russians the latter was the precondition for their agreement to the former.

Guterres’s office has acknowledged that the real deal was more than the grain deal, and that compliance also required the US, the UK and the European Union (EU) states to lift the sanctions they have imposed on Russian shipping, port access, vessel insurance, and commodity exports.  “An agreement was also reached with the Russian Federation,” Guterres’s press office announced on July 22, 2022, “on the scope of engagement of the United Nations to facilitate the unimpeded exports to world markets of Russian food and fertilizer – including the raw materials required to produce fertilizers.  This agreement is based on the principle that measures imposed on the Russian Federation do not apply to these products. Simultaneously, the Russian Federation has committed to facilitate the unimpeded export of food, sunflower oil and fertilizers from Ukrainian controlled Black Sea ports.”

Of the 43 releases which have followed from Guterres’s office since last July,    not a single statement, press release, report,  or update identifies the terms of agreement on Russian grain and fertilizer exports, or acknowledges Russian protests against Ukrainian, UN, EU,  and US  non-compliance.

On March 23, Griffiths announced he had met Russian officials, and claimed:  “The discussions focused on the implementation of the two agreements signed on 22 July 2022: the Black Sea Grain Initiative between the Russian Federation, Türkiye, Ukraine and the United Nations; and the Memorandum of Understanding between the Russian Federation and the UN, to facilitate unimpeded exports of food and fertilizer. The UN Secretary-General expressed today that the UN remains fully committed to the Black Sea Grain Initiative, as well as to efforts to facilitate the export of Russian food and fertilizer.”

Griffith’s last sentence was lying. The Russians had told him they would agree to extend the grain deal until July on condition Guterres and Griffiths did what they promised they were doing. They didn’t.

Source: https://www.un.org/
Pivdennyi is the Ukrainian name applied to Yuzhny port since 20017.  The grain shipping operations there have been blocked since the last extension of the agreement started in April.   The UN figures indicate that shipments of grain from Yuzhny have amounted to 10.1 million tonnes, 33% of the 31.1 million tonne total since the agreement commenced.  

Because Guterres and Griffiths refused, Russian officials have announced that the current 120-day extension of the grain deal to July 17 will be the last. In the meantime, because Russian ammonia exports are still stopped, Ukrainian grain cargoes have been blocked from Odessa and Chernomorsk, and restricted to Yuzhny (aka Pivdennyi).   In retaliation, the Ukrainians have attacked the  new ammonia and LPG export terminals at Taman with drones.

On June 1, Guterres and Griffiths acknowledged the ammonia restriction, but they refuse to reveal publicly their role in preventing the removal of the fertilizer blockade. “The Russian Federation has informed the JCC [Joint Coordination Centre] of its decision to limit registrations to the port of Yuzhny/Pivdennyi as long as ammonia is not exported. And currently, it is not. Since 24 May, the number of inspection teams at the JCC has been reduced from three to two. The limited registrations and reduced inspection teams contributed to the drop of the average daily inspection rate down to three. This is a very serious situation. We need to move forward. The Initiative is bound for renewal on 17 July. Global hunger hotspots are increasing — as we have been notifying you on a regular basis — and the spectre of food inflation and market volatility lurks in all countries.”

This new UN statement also concealed that Ukrainian officials in Kiev were attempting to change the terms of the July 22, 2022, deal, adding ports and other commodities to the original terms.

This was a serious violation of the July 2022 agreement, and it threatened the negotiations for a new  extension of the grain deal. Russia dismissed it peremptorily. On May 24, Zakharova was asked at her weekly ministry briefing to comment on a Reuters news agency report that “Ukraine would unblock Russian ammonia transit only if the grain deal was expanded. In particular, the source mentioned expansion of the list of goods to be exported and increasing the number of ports. Is Russia considering an option of expanding the deal format taking into account guarantees to unblock ammonia transit?”

Zakharova replied: “I can say that in the context that you mentioned, the Russian side has repeatedly made its position known to other stakeholders during expert meetings that expanding these two categories [the list of goods and the number of ports] is out of the question.”

Left: Maria Zakharova of the Russian Foreign Ministry. Right: Abdullah Abdul Samad Dashti whom Guterres appointed coordinator of the grain initiative operation last December. Trained in the UK and US, Dashti has served as a senior Kuwait naval officer. His last active appointmentbefore retirement was as Kuwait’s military representative to NATO.   Before Dashti took over, an American Frederick Kenney and a Briton Amir Mahmoud Abdulla had been picked by Guterres to run the operation.

On June 1, Sergei Vershinin, the Russian Foreign Ministry counterpart for Griffiths, told the press: “Our position remains unchanged – ammonia exports are part of the existing agreements and were supposed to start simultaneously with Ukrainian grain shipping. This fully corresponds to Mr Guterres’s announced goals on ensuring global food security, and there is no room for any additional demands in this respect. We have repeatedly explained this position to UN officials, as well as to the representatives of Türkiye and Ukraine as the parties to the Black Sea Initiative, including at the Istanbul meeting on May 10-11. It is even more surprising that being fully aware of our position, the UN Secretariat continues to exploit the ammonia issue in a bid to create a semblance of some new effort and contact. Moreover, the lack of any result is obvious – the ammonia pipeline has not been operating. Without resolving this problem and the four others I mentioned, there is no way to continue the Black Sea Initiative after July 17, not to mention any discussion of additional ports or the expansion of the range of Ukrainian exports.”

To date, Russian officials have not commented on the weaponization of the appointments Guterres and Griffiths have made to the Black Sea Grain Initiative; the Russians have concentrated their fire on Guterres. He has ignored them; he was reappointed to a second term as secretary-general from January 2022 until December 2026, and cannot run for a third term.

Preoccupied by the battlefield developments and the sanctions war, the Russian media have largely ignored the food war. Without Russian bloggers to rely on, the alternative media in the US have also missed what Guterres and Griffiths have been doing. What follows is a rare analysis  in Russian, published last week, of the new moves the Russian government will make in the food war.  It appeared in Vzglyad, the bellwether of Russian security analysts; the translation is verbatim, without editing. Illustrations have been added.

Source: https://vz.ru/

June 2, 2023

Russia has begun to punish Ukraine for the failure of the grain deal
The ammonia pipeline from Russia to Odessa will soon become meaningless
Supplies of Ukrainian grain to Europe bring profits to Kiev, but not to Moscow

By Dmitry Skvortsov

It seems that for the first time Russia has done something which proves Moscow’s real intentions to end the so-called grain deal. At least, the UN claims that “restrictions have been introduced in the registration of ships heading to the Ukrainian port of Yuzhny.” This directly contradicts everything that Ukraine recently demanded. What does the Togliatti–Odessa ammonia pipeline have to do with it and the possibility of resuming active offensive actions as part of a special operation?

Russia has notified the Joint Coordination Center (JCC) in Istanbul about the restriction of registration of vessels heading to the Ukrainian port of Yuzhny as part of the grain deal. This was stated by the representative of the UN Secretary-General,  Stephane Dujarric. This measure will be in effect, according to the UN representative, “until the export of ammonia is carried out.”

Left: Dmitry Skvortsov; centre, Stephane Dujarric de la Riviere, a US television reporter before he joined the UN,  Dujarric is a member of the Rothschild family through his mother;    Right, Turkish President Recep Tayyip Erdogan and Defense Minister Hulusi Akar at the signing of the two food war agreements in Istanbul on July 22, 2022. Ukrainian grain deliveries at discount price to Turkey have kept the price of Turkish flour and bread down during Erdogan’s presidential election campaign which culminated on May 14. Turkey has taken 3.1 million tonnes, 10% of the Ukrainian grain shipped so far, according to the UN data. This is the third largest volume after China and Spain, and ranks ahead of Italy, The Netherlands and Egypt.  

Click to enlarge view of data presentation by the UN.
The needy-country share of the Ukrainian export total, 625,000 tonnes of 31.1 million tonnes, amounts to just 2%.

Meanwhile, until recently, Ukraine demanded exactly the opposite. In Kiev, they acknowledged that they would allow the export of ammonia from Russia, but they set their own conditions for this. “If the deal includes an ammonia pipeline, then Ukraine should receive additional things that will serve our national interests,” they said in Kiev. – This is an expansion of the geography of the agreement and the list of goods (for export).” The Russian Foreign Ministry immediately rejected this – and now, it seems, Russia has begun to use its own tools to fulfill the terms of the grain deal.

The grain deal was concluded on July 22, 2022 in Istanbul with the mediation of the UN and Turkey and provided for permission to pass through the corridor agreed with Russia (after inspection in Turkey) of transport vessels for the export of Ukrainian grain from the Ukrainian ports Odessa, Chernomorsk and Yuzhny. In exchange for this, the UN promised to achieve the lifting of restrictions by the EU and the United States on the insurance of Russian vessels and Russian freight on foreign ships, the lifting of bans on Russian agricultural exports and fertilizer exports, the unfreezing of accounts of Russian companies exporting agricultural products, the lifting of sanctions on exports to Russia of spare parts for agricultural machinery,  and re-connection to the SWIFT system of the Rosselkhoznadzor. The fifth condition was the resumption of operation of the Togliatti–Odessa ammonia pipeline.

The deal provided for limiting the military activities of the parties at sea, clearing sea lanes and providing grain carriers with a corridor for safe passage to and from the Bosphorus.

Such a corridor for transport vessels was created, and the export of Ukrainian grain by sea was uninterrupted until recently. Nevertheless, in the part concerning Russian agricultural exports, the terms of the transaction were not fulfilled.

Detained Russian ships with grain and mineral fertilizers have remained in European ports. Only some of them managed to be rescued in order to send their cargo to the poorest countries for free (European countries said they did not want to ‘let Putin earn money to wage war’).

As for Ukrainian grain, the bulk of Ukrainian grain exported since August 2022 (more than 30 million tonnes) was sent mainly to well-fed EU countries. The needy African states, with the assistance of the World Food Program, got only 2.5%.

For Ukraine, exports were important both for maintaining the efficiency of the agricultural sector and for obtaining foreign exchange earnings in a declining economy. It was also important for Europe that Ukraine could pay for part of the necessary imports “from its own money”, and not from the tranches of financial assistance transferred to it.

For Turkey, the deal not only ensured the growth of Erdogan’s authority, but also provided the Turkish flour milling industry with inexpensive raw materials. This allowed Ankara to maintain domestic bread prices at an acceptable level in conditions of inflation and increase flour exports to neighbouring countries.

But only Russia received next to nothing from the deal.

The rationale for concluding a grain deal had been statements about the need to prevent famine in the poorest countries, which would suffer from the disappearance of large volumes of grain from the market. In 2020-21, for example, Russia and Ukraine, together, exported 56.5 million tonnes of wheat – more than the third and fourth largest wheat exports of the United States and Canada combined. The withdrawal of such volumes of grain from the market inevitably led to an increase in food prices. Wheat futures on Western exchanges have risen by about one and a half times since January 2022.  The deal allowed prices to stabilize, and in 2023 they even went down.

Chicago exchange wheat futures trajectory of price, July 2022 to June 2023, with volume at bottom of chart. Click to enlarge view: https://www.barchart.com/

In fairness, it should be said that the grain deal partly helped in this. If European countries had not received the cheap Ukrainian grain, they would not have gone hungry. But their purchases of grain would inevitably have caused the price to rise on world markets, and that would have hit the poorest grain–importing countries hard. Russian grain supplies did not have a strong impact on the market, as they did not go through exchange trading and had almost no effect on pricing.

With fertilizers, everything was exactly the opposite. The rise in gas prices has sharply increased the costs of European fertilizer producers. And in these conditions, their export from Russia was blocked: Uralchem had about 262,000 tonnes blocked in the ports of Estonia, Latvia, Belgium and the Netherlands; Akron – 52,000 tonnes,  and Eurochem – almost 100,000 tonnes.  This caused an increase in prices, which partially compensated for the losses of the European chemical industry.

How the rise in fertilizer prices affected the poorest countries has not been widely discussed. But, for example, not so poor Brazil, in order to support its agricultural sector, had to make titanic efforts to ensure the supply of fertilizers from other sources after the reduction of Russian exports. But nonetheless, world coffee prices rose by 18.8% for Arabica and 6.6% for robusta in 2022. In 2023, growth [in the Brazilian coffee crop price], according to Bloomberg, continued  hitting a 20-year high.

The Togliatti-Odessa ammonia pipeline with a length of 2,417 kilometres was built in the late 1970s. It connects the production located in the city of Togliatti, Samara region, with the port terminal in the port of Yuzhny (Ukraine). On the territory of Russia, it is served by PJSC Transammiak. UGP Ukrhimtransammiak is engaged in servicing the Ukrainian site. Before the start of the special military operation, about 2.5 million tonnes of raw materials were handled annually through the pipeline. Transit was stopped on February 24, 2022.

Russian manufacturers also shipped liquid ammonia for export through the ports of Estonia and Latvia. Until recently, Russia itself did not have such port terminals.

As long as it was possible to use the legacy of the USSR – the port facilities of the neighbouring republics, there was no great problem. But, nevertheless, in 2003 JSC Tolyattiazot in 2003 had begun design and survey work for the construction of an alternative ammonia pipeline to the port of Taman and a port terminal. After the company came under the control of Uralchem in 2008, construction was suspended.

The Crimean spring of 2014 and the first anti-Russian sanctions forced the management of Uralchem to resume work on the project. In 2018, when the design work was already completed, the volume of investments in the construction of the pipeline and terminal was estimated at 40 billion rubles, and the completion of the work was planned for 2025. In 2022, it was decided to accelerate the work so that the commissioning would take place in 2023.

AMMONIA PIPELINE BETWEEN TOGLIATTI AND ODESSA

Source: https://www.ft.com/
The publicity which the sabotage of the Nord Stream gas export pipelines has attracted has ignored the parallel sabotage of the Togliatti ammonia pipeline and the attempted sabotage of its replacement at Taman.  

What is behind the Russian decision on the grain deal?

Russia has threatened several times to suspend its participation in the grain deal. On several occasions the reason for such statements was the actions of Ukraine (for example, the attack of naval drones on Sevastopol). With reason, the Russian side noted that the safe corridor should not be used for Ukraine to conduct operationsagainst Russia.

Russia’s actions are dictated, among other things, by economic logic and the desire to achieve the fulfillment of the grain deal in terms of lifting sanctions on Russian grain exports and fertilizer exports. Now, after Erdogan’s victory, Russia is no longer afraid to negatively affect the election results with its actions – the elections have already taken place. Moreover, even Europe has had enough of Ukrainian grain, and a number of Eastern European countries have already closed off their importation.

Simply put, it appears Russia does not intend to extend the deal, because it has not received anything from it. “Without solving this problem… we are not talking about adding ports and expanding the range of Ukrainian exports, but also about the further continuation in principle of the ‘Black Sea grain initiative’ after July 17,” the Russian Foreign Ministry said in a recent statement.

The launch of the Tolyatti–Taman ammonia pipeline in the near future will also make the ammonia pipeline to Odessa unnecessary. But why not take advantage of the Ukrainian persistence in refusing to unblock it?

Finally, it is possible that Russia is preparing for decisive action at the front. If the Russian command plans to advance along the Black Sea coast in order to liberate not only Nikolaev, but also Odessa, the resumption of hostilities at sea is inevitable. And the safe transport corridor of the grain transaction will only be a hindrance to this.

NOTE: Will Ukraine be able to export grain if Russia withdraws from the deal?  Yekaterina Entina, Professor and Head of the Department of Black Sea-Mediterranean Studies at the Institute of Europe of the Russian Academy of Sciences responded on June 3: “If we turn to the original agreements, we remember that Kiev mined the Black Sea so that the Russian Navy could not carry out attacks from the sea against its  territories. And so when the grain deal was signed for the first time, a specific corridor was cleared, the parameters of which, as it is believed, only Kiev knows for the course of civilian vessels. Accordingly, if we assess a scenario in which Russia withdraws from the grain deal as a result of the inability to agree and as a result of Kiev's position containing a certain set of threats, then this also removes the need to comply with the agreement that the Russian Navy does not use this corridor for military purposes. It seems to me that this scenario is quite obvious and it should be obvious to the Euro-Atlantic partners and also to Kiev itself."