Black Sea deal unlikely to boost Russian food exports in short-term

Written by Jleeb Biansky

MOSOCON (Reuters) – Analysts and industry sources said on Wednesday that a possible agreement to alleviate the restrictions imposed on Russia’s arrival in the international agricultural markets, which Washington and Moscow are ranging as a blessing for global food security, is unlikely to have an immediate impact, the analysts and industry sources said on Wednesday.

But the agreement in which the United States has mediated, if this happens, can provide the aspirations of Vladimir Putin in the long run of Russia’s position as an agricultural superpower and secure a batch that affects the need in foreign exchange revenues.

The United States reached separate deals this week with Ukraine and Russia to stop its maritime attacks in the Black Sea and stood up against energy targets, with Washington’s approval to help lift some Western sanctions against Moscow.

In a post on Tuesday, Kirill Dimitriev, head of the sovereign wealth fund in Russia, and the Putin Special Envoy on International Economic Cooperation in the deal, praised it to secure “basic grain supplies for more than 100 million additional people.”

A UN spokesman said on Wednesday that he would “decisible to global food security.”

But Andrei Sezouf from Sofikon’s consultations that Russian exports and fertilizers have already reached record levels during the conflict with Ukraine, with no major security incidents related to the war that affects the infrastructure that exports grains.

He said, “Both Ukrainian and Russian exports from the Black Sea are currently going without important issues, without a” official truce “and without any” pill deals. “

“The baseline scenario is that exports will continue as they were.”

Russian agricultural merchants and their partners in the markets that Russia generally consider ways to circumvent Western sanctions, which are seen as a source of inconvenience more than a major obstacle.

Short -term protection, long -term ambition

Instead of restricting the sanctions, Russian exports instead were by hats aimed at curbing inflation, which is more than 10 %.

Russia is the best source of wheat in the world. But it reduced export shares and increased export duties to prevent nails in local prices for bread and other agricultural products.

This prompted exports to a decrease to 40 million tons expected in the 2024/25 season, a decrease from 55 million tons in the previous season.

“In the end, we protect the interests of Russian consumers. This was the case with grain crops and sunflower oil,” Prime Minister Mikhail Michevin said on Wednesday.