Headache: why Russia threatens not to extend the grain war with Ukraine
Putin declared September 7th for Eastern Economic February that practically all the grain exported from Ukraine in accordance with the agreement went to the countries of application, and not to the poorest countries, as should be achieved.
“The acceptance by developing Turkey as an intermediary country, that is, almost all grain exported from Ukraine, is not directed to developing and poorest countries, but is applied in the country,” Putin said. According to him, only two of the 87 ships and 60,000 tons sold out of more than 2 million tons were sent to developing countries. “Maybe we should think about reducing the export of consumption and other foodstuffs along this route,” Putin added.
The President also noted that no restrictions were issued on the export of Russian consumer goods. “Formally, with our restrictions on emissions, just like with food, but with known restrictions on emissions,” Putin said. “This is such a cunning and observable situation, when there seems to be no natural opposition to our products, but there are restrictions associated with logistics, with the charter of ships, with the transfer of money, with insurance.” This continues to push prices up on world markets, Putin said.
He added that at present, the presence of a high degree of security of the UN António Guterres and the organization as a whole, many restrictions, in particular on freight, have been confirmed, and the situation has been identified and varies depending on the party, but there are claims to the problem of the regime, and he intends to arrest this with Turkish President Recep Tayyip Erdogan.
Erdogan supported Putin and said that he would discuss this issue during a judicial meeting in Samarkand at the summit of the Shanghai Cooperation Organization on September 15-16.
“Secret Protocol”
Permanent Representative of Russia to the UN Vasily Nebenzya did not rule out The consequences of the action of the grain, which expires in a delay, have disappeared, that part of the arrangements for exports from Russia has not increased. “Not a single Russian ship has taken Russian grain out of Russian ports for export,” he told reporters.
In the very agreement on the export of the Ukrainian executive body, signed in Istanbul on July 22, Russia, Turkey, Ukraine and the UN, the text of which published there are no reviews on the UN website about the withdrawn restrictions on exports to Russia and fertilizers, especially since they were taken out of control as USAso EU. However, at the same time in Istanbul, First Deputy Chairman of the Russian Parliament Andrey Belousov and Guterres signed another document – “Memorandum of Understanding between the Russian Federation and the UN Secretariat on promoting the promotion of food products and emissions to world markets.” The text of the memorandum is in the public domain materials the UN and performance representatives of general organizations.
The main objective of the memorandum is to provide transparent and unprecedented offers available for supplies and deliveries, including raw materials for their production, to world markets, declared July 22 Russian Foreign Minister Sergei Lavrov. “We are talking, in particular, about how to exclude protocols that affect the US and the EU in terms of financing, insurance and logistics, specific results for these products from the restrictive measures imposed against our country,” the statement says. minister. . The term of the memorandum is three years.
Sanctions
Sanctions and the truth of what happened, albeit indirectly, Oksana Lukicheva, commodity market analyst at Otkritie Investments. “Not high and part of the transaction, according to which they should not be registered, are connected with the entry of foreign ships into Russian ports, with chartering, insurance and payment for operations,” the expert says. These proposals should be withdrawn, but in practice nothing works. No one is going, of course, nothing is canceled, and the market is quickly flooded with grain – wheat exports from the EU are outpacing.”
“It was said that they would not be attracted to us,” Vladimir Petrichenko, General Director of ProZerno, slowed down Forbes. – Formally, this is true: there is no solution against our food, consumption and consumption at the mass level. The UN gladly confirmed this. But, as usual, everything is in the details. We have done our part: grain and other foodstuffs are coming with Ukraine, but there is no movement on the part of those who introduced against us.” The reason, according to Petrichenko, is that we are talking about the use of large non-governmental organizations. “At the same time, both the UN bodies and the measures of different countries are doing nothing to influence private companies,” the expert produces.
How many cargoes were exported from Ukraine and where
By data Joint focal point in Istanbul, as of September 5, the total transport of consumption and other food products exported from three Ukrainian ports is 2.13 million tons, including corn, wheat, sunflower seeds, sunflower meal, sunflower oil, peas, rapeseed. In total, 197 flights were allowed that day – 107 incoming and 90 outgoing.
Spanish newspaper El Pais informed On September 8 in Ukraine, that of the total exports with the available part – 38%, or about 900,000 tons – were actually delivered to the ports of use, “surveillance profit does not allow tracking whether the community is the final destination of the goods.” 20% of the rest of the exports, according to newspaper estimates, were to Turkey, 14% to Asia (China, India and South Korea), and the remaining 27.5% were sent to the countries of the Middle East and Africa (Egypt, Iran, Sudan, Kenya) . and Somali). The United Nations World Food Program did charter two ships. One of the most important docked in Djibouti with 23,300 tons of wheat destined for Ethiopia, while the other transported 37,500 tons of wheat to Turkey, where the grain will be ground into flour and sent to Yemen, the Spanish newspaper writes.
The Joint Focal Point in Turkey confirmed that on August 30, the Karteria went from the port of Yuzhny to Turkey with 37,500 tons of wheat purchased by the World Food Food Program for the production of flour for Yemen. 15 August the vessel Brave Commander came out from the port of South in the order of Djibouti with 23,300 tons of wheat destined for Ethiopia as part of the World Food Security drought relief programs.
Prices are not reasonable
The president’s assertion of rising prices cannot be propagated by facts. According to the results of August, the fall in the average index of food values of the Food and Agriculture Organization of the United Nations (FAO) resumed for the fifth month in a row, story in the latest FAO review. FAO natural movement of the international food price index index. It is formed on the basis of average values of price indices for five commodity groups. The average FAO Cereals Index in August was 1.4% below its July figure, but still 11.4% above its August 2021 level.
In August, a sharp rise in prices for wheat incidence by 5.1% – thus, the fall in minerals, especially in Canada, the United States and Russia, as well as seasonal offers in the countries of the Northern Hemisphere, where harvesting continues, and the recovery of exports from clean ports of Ukraine . At the same time, record prices for wheat are still 10.6% higher than in August last year. In August, compared with rising prices for vegetable oil, dairy products, meat and sugar, but they are slightly higher than a year ago, the survey says.
By the end of August, world prices for feed grain, on the contrary, slightly increased by 0.2%, being 12.4% higher than last year. Global growth prices increased by 1.5%, which sharply reduced the decline in consumption growth in the US and in the US due to hot and elevated conditions, but at the same time reduced the decline in exports from Ukraine.
Russian exports decreased, but were not directed
Exports to the US were delayed in August and August, but not unexpectedly, analysts said.
“Russian exports did not rise, but did not receive from last year, which makes up the participants in the consumer goods market throughout the Black Sea region, manufacturers complain about falling prices,” says Lukicheva from Otkritie Investments.
The SovEcon analytical center conducted a preliminary assessment of wheat exports from Russia in August-August 2022 at 5.9 million tons, which is 27% lower than in the same period of the last agricultural season. According to the think tank, exports remain sluggish as prices are FOB (a regime in which only the seller pays for transportation costs before the goods are delivered on board the vessel hired by the buyer. — Forbes) for Russian wheat are too high compared to other suppliers, primarily from the EU.
By grade wheat exports in July-August analytical year 2022 (including EAEU countries) amounted to 6 million tons against 7.55 million tons last year. Wheat exports in September could increase to 4.1-4.3 Mt (again includes supplies from the EAEU country) from 3.65 Mt in August, but health is below 4.7 Mt as it was in September 2021, according to Rusagrotrans analysts.
Union of Exporters reportedthat supplies are mainly in contact with Russia’s partner from the countries of the Middle East and North Africa (Russian grain is carried by ships under the flags of different states). According to experts, Iran is expected to take the first place in imports in Russia in August with 1.39 million tons, Turkey is in second place with 1.25 million tons, and Egypt is next with 1.14 million tons. The top five buyers also include Saudi Arabia and Israel with imports of 669,000 tons and 366,000 tons, respectively.
Some analysts believe that export prospects have been improving recently. Export prices for Russian wheat with 12.5% protein for delivery in September, experts from Rusagrotrans reported on September 8, fell by $2 per ton over the week, to $305-310 per ton (FOB Novorossiysk). However, due to the threat of non-extension of the closure of the export of Ukrainian consumption in the introduction, they again increase to the previous level of $310-312 per ton FOB. At the same time, as analysts note, prices in competing countries are much higher: a ton of TPO wheat oil increased by $2, to $347, a ton of French 11.5% fell in price by $14.5, but still costs more than Russian oil – $326 .
Why don’t Russian ships sail?
What exactly did Vasily Nebenzya, Russia’s Permanent Representative to the UN, mean when he said that some of the agreements have not been increased? “Apparently, it means that our ships could have left if we had not been banned,” accusation Petrichenko from ProZerno. – They refuse to work with organic grain and export-import freighters, insurers, and even buyers. The World Food Program doesn’t even consider our grains in their tenders.”
So far, there is no one to replace spouses from unfriendly countries in Russia. “Russian exporters do not matter for shipping, only river-type vessels are possible,” says Lukicheva from Otkritie Investments. – This greatly slows down exports. Foreign ships continue to be parties to Russian ports, which slows down the pace of exports.”
“Sending ships [с российским зерном и удобрениями] under regulatory control, and not only under regulatory control, is indeed extremely difficult, despite the fact that these cargoes are officially released from surveillance, a source in the grain industry, who requested anonymity, told Forbes. – Restriction of ownership of the owners if the vessel uses the flag of another state. If the vessel is owned by a Russian company or its owner is from Russia, then it is very difficult or impossible for the vessel to enter the port of an unfriendly country. Just like insuring the cargo by increasing the amount of payment for transportation.
“It would have been better if it had been possible not to renew”
Analysts believe that the revision or cancellation of grain could be beneficial for the producer.
“The non-renewal of the case has been positive for Russian exports, because its emergency discounts on Russian wheat are currently increasing, which is not always beneficial for producers and slows down exports,” says Lukicheva from Otkritie Investments.
Petrichenko from ProZerno agrees with her. “The best thing would be if they said that they did not renew, because due to the fact that we suffered losses,” the expert. “We have nothing but a headache from this. It lowered world and, accordingly, our prices. If the deal is stopped, prices will rise and we will be able to sell grain on more favorable terms.”