In a telephone conversation and as part of diplomatic outreach to revive the Ukraine grain deal, Pakistani Foreign Minister Bilawal Bhutto Zardari, on 26 July 2023, spoke to his Russian counterpart Sergei Lavrov. Bilawal has already spoken to the Turkish Foreign Minister, the US Secretary of State, and the EU High Representative on restoring the Black Sea Grain Initiative (BSGI) that allowed Ukraine to export grain despite the conflict. The Ukrainian Foreign Minister, who visited Pakistan recently, also requested Islamabad to play a role in reviving the deal. Bilawal has since then been in talks with relevant countries and essential stakeholders.

Russia unilaterally pulled out of the arrangement on 17 July 2023. BSGI has allowed grain exports from Ukraine through the Black Sea under an agreement among the United Nations (UN), Turkiye, Russia, and Ukraine. Russia’s withdrawal has drawn out strong reactions from leaders and International Organizations worldwide.  Some of them promptly condemned Moscow’s decision.

Expressing Pakistan’s unease over the ending of BSGI, the Foreign Minister said that the ensuing inflation and food security challenges would badly impact developing countries, including Pakistan, already under economic pressure. Bilawal hoped that efforts to revive and resume BSGI would realize dialogue accommodating the concerns of all parties.

The Russia-Ukraine war since February 2022 led to the closure of grain shipments from Ukraine via the Black Sea. This resulted in a sharp rise in world food prices and famine threat in many countries. To deal with the issue, in April 2022, the United Nations Secretary-General (UNSG) General António Guterres, met with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy to propose safe transportation of grain and foodstuffs from Ukrainian ports.

The resulting agreement was signed in Istanbul on 22 July 2022, valid for 120 days. The deal finalized procedures and mechanisms to export grain to address the food crisis. The Initiative allowed food and fertilizer exports from three Ukrainian ports in the Black Sea, i.e., Odesa, Chornomorsk, Yuzhny/Pivdennyi. The Joint Coordination Centre (JCC) was established in Istanbul to monitor the implementation of the Initiative. The JCC included representatives from Russia, Ukraine, Turkiye, and the UN.

The recommencement of Ukrainian agricultural exports via the Black Sea amid the ongoing war is a beacon of hope in a world that greatly needed it, UNSG said at the signing ceremony. The UN plan was linked to making arrangements for Russian food and fertilizer to reach global markets and take steps to control escalating food prices.

The decision by Russia to withdraw from the BSGI stems from objections and unmet demands. It will be seen in the broader picture of the ongoing Russo-Ukraine war.- Russian President Vladimir Putin had expressed disappointment in a few aspects of the agreement.

Putin also criticized sanctions, which he claimed hindered Russia’s agricultural exports. Moscow also cites continuing Ukrainian provocation and attacks on civilians and military facilities in the Black Sea vicinity. The decision was announced just a few hours after an attack on the Crimea Bridge, blown up by drones leaving two deaths. Even though Russian President Putin considered such an action a terrorist attack, a Kremlin spokesperson assured that the decision to halt the grain deal was unrelated. According to the Federal Service for State Statistics of Russia (Rosstat), the surplus wheat stocks in the country in February amounted to over 17 million tons, almost 1.6 times more than the year before.   Within two days of Moscow announcing its decision to end the deal, the international market has seen a constant rise in the price of wheat.  The decision to withdraw from the BSGI can be linked to controlling future market prices and making grain exports more sustainable and competitive.

Following his victory in the May presidential elections of this year, Recep Tayyip Erdogan has been gradually shifting toward the West and GCC seeking foreign investments. While Moscow reacted calmly to Ankara’s willingness to Sweden’s NATO accession, the recent transfer of five Ukrainian commanders captured by Russian forces back to Kyiv and Erdogan’s remarks supporting Ukraine’s entry into NATO has sparked annoyance.  These also looked like an effort to pressure Moscow to extend the grain deal.

Kremlin spokesman has warned that shipping grain out of Ukrainian Black Sea ports could now be risky, given the lack of Russian security assurances. At the same time, there have been suggestions that Turkiye could step in to protect shipments. Either way, the guarded reaction from the Kremlin showed that Russia is currently not in a position to escalate tensions with Turkiye, which remains the only genuine intermediary in Moscow’s relations with the West and Kyiv, as well as one of its key trade partners.  Turkish President expressed his intention to engage in discussions with Russian President Vladimir Putin, expressing hope for rejoining the agreement.

The deal would be one of the critical issues on the agenda for his meeting with Putin in Turkiye in August 2023. But given how transactional bilateral relations have become, the two countries may still come up with alternative arrangements.

The BSGI holds massive importance due to Ukraine’s vital role as an agricultural producer and exporter of corn, wheat, and sunflower.  Russia and Ukraine export around 30 percent of the cereals and over 67 percent of sunflower oil. Since its inception, BSGI has delivered more than 32 million tons of grain and other commodities to countries needing food shortages. It has contributed to price stability, a smooth supply chain, and global food security.

For the first time since World War II, the impact of food security interruption resulting from one conflict is seen in every country. Among the most affected regions will be the Middle East, Africa, and Asia, as they are the primary grain importers. The link between disagreement and hunger is interconnected. Much must be done to incorporate peace-building objectives into creating durable food delivery.  While the global food security crisis predates the Russian invasion of Ukraine, the war has exposed international food arrangements’ interconnected nature and vulnerability.

Russia’s invasion of Ukraine has significantly increased global food prices. However, since its signing in July of last year, BSGI has played some role in mitigating price increases to a certain extent. However, Russia’s past intention of repealing the deal and alternate routes of substantial grain export was being explored. Ukraine’s Danube River ports have been identified as a viable shipping mode. However, such ports are considered less efficient and involve high transportation costs.

Implications for Pakistan:

While there will be consequences for global food supplies given the end of the BSGI, it remains unclear just how severe the fallout will be. With Russia pulling out of the agreement, the routes for trade have been seriously compromised. The fact that this could lead to the deal being scrapped is a cause of concern, rightly identified by Bilawal Bhutto. Pakistan is already struggling to meet its local wheat requirement and has become an importer of some agricultural goods. On top of all this, inflation, especially food price rises, has reached record levels.

The impact of this drawn-out war has been enormous and all-encompassing; if the BSGI were falling apart, the consequences would be devastating, especially for developing countries.

Amidst all this, Foreign Minister Bilawal Bhutto and all relevant representatives have agreed to remain engaged on this issue to reach a consensus. It is good to see that he has not only been addressing this issue with the urgency that is needed and required, but also, we must appreciate how thoughtfully Bilawal Bhutto has been balancing Pakistan’s relationship with Russia and Ukraine concomitantly.