Vladimir Putin continues his psychological warfare. He brandishes, once again, the food weapon to try to move the lines of the Westerners who have come to support Ukraine. Monday, July 17, the Kremlin thus announced the suspension of the grain agreement which ensured the export of Ukrainian grain from three Black Sea ports.
This agreement, between Ukraine and Russia, under the aegis of Turkey and the United Nations, was signed almost a year ago to the day, on July 22, 2022. Since then, it has been renewed three times, but Moscow seemed increasingly reluctant to continue. In May, it had only been extended for sixty days instead of the one hundred and twenty days initially planned.
“In one year, this maritime corridor has made it possible to export 33 million tonnes of grainnotes Arthur Portier of Agritel. Moscow’s announcement today therefore opens a period of uncertainty. » Unsurprisingly, the markets reacted immediately. On Euronext, wheat and corn prices increased by nearly 4% at the opening. The same increase was seen on the American market in Chicago.
A “suspension”, not a rupture
However, as the session progressed, the rise steadily declined. “We are not at all in the same situation as a year ago, when wheat was trading at 350 euros per tonne. Today, we are at 235 euros per ton”, reacts Mr. Portier. He notes the importance of the term used by Moscow of “suspension”. It is therefore not a clean break from the agreement, but an expressed desire to make its renewal conditional on a negotiation to ease the sanctions imposed. In the line of sight, the restrictions which weigh on its own exports of agricultural products and fertilizers.
Mr. Putin is once again playing the card of a fear of rising food insecurity on the planet. The outbreak of the war in Ukraine had caused a surge in grain prices, aroused by the fear of a disruption in supply with the shutdown of Ukrainian exports. This rise in prices, fueled by speculation more than the very availability of cereals, had endangered the poorest and most importing countries in Africa, the Middle East and Asia. After the establishment of the maritime corridor, the markets for grains and oils had fallen back.
“The maritime corridor remains an important exit door, but since the start of the war rail or land alternatives have been developed. Moreover, in recent months, out of 4.5 million tonnes of grain exported by Ukraine, only 1.5 to 2 million passed through the Black Sea”says Mr. Portier.
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