UN Proposes Extension of Black Sea Grain Deal to Putin in Exchange for EU Time to Connect

US: United Nations and Turkey brokered a pact, known as the Black Sea Grain Initiative, that enabled Ukraine to safely export millions of tons of grain from three key ports in the Black Sea for the past year. However, the agreement is set to expire on Monday, and Russia's reluctance to extend it has put the future of the exports in jeopardy. The economy felt the effects of high grain prices, which surged even further following the onset of the Russia-Ukraine conflict in February 2022, causing disruptions in global grain markets. Since then, Ukraine has exported almost 33 million metric tons of Corn, Wheat, and other grains under the arrangement.

Russia has threatened to withdraw from the pact due to unfulfilled demands aimed at improving its own grain and fertilizer exports. The Black Sea grain deal is set to expire on Monday if Russia quits. Blames Western sanctions for hindering the financing and insurance of its exports, insisting that the current agreement has not worked in its favour. Sergey Lavrov, the foreign minister of Russia, has claimed that an agreement which guaranteed Moscow's right to export fertilizer is not being respected.

United Nations Security Council is scheduled to convene a meeting in Ukraine, which will be chaired by British Foreign Secretary James Cleverly. The meeting is expected to involve several European foreign ministers, and discussions are likely to revolve around the ongoing conflict between Ukraine and Russia. Meanwhile, the World Food Program has increased its Wheat procurement from Ukraine to 80% in 2023 from 50% in previous years, with 725,000 metric tons of Ukrainian Wheat already shipped to combat hunger in countries such as Afghanistan, Sudan, Djibouti, Ethiopia, Kenya, Somalia, and Yemen. The situation in Ukraine remains uncertain, and the international community continues to monitor developments closely.

United Nations and Turkey-initiated Black Sea grain deal, which aims to alleviate global food shortages and stabilize grain prices, is in danger of lapsing as Russia debates its renewal. Despite preventing famines, Russia has threatened to withdraw from the deal, citing restrictive Western sanctions against Russian individuals and state-owned agriculture banks. The deal's extension expires on Monday, and the UN has requested a proposal from Putin on how to keep it going. In other news, Southern Hemisphere, a Lithium extraction company, is making headway with "sorption-type" direct extraction in Germany, promising faster Lithium extraction, reduced environmental impact, scalability, and high-grade Lithium output.

United Nations Secretary-General has proposed linking a subsidiary of Russia's Agricultural Bank to the SWIFT international payment system as part of a plan to extend the Black Sea grain deal. This move aims to keep the Black Sea grain deal alive, which was initially reached last year, allowing Ukraine to export millions of tons of grain. However, Russia has repeatedly threatened to withdraw from the deal, which has only been renewed for short periods. The proposal to connect the bank to the SWIFT system is seen as a concession to Russia, as the EU authorities can only make payments under the grain deal. Russia argues that keeping the Russian Agricultural Bank outside the SWIFT system slows down payments, and the inclusion of the bank in the system is tied to the extension of the grain deal. After the conflict in Ukraine ends, the European Union may consider allowing a Russian state agricultural bank to regain access to the SWIFT payment system. The reconnection of some Russian banks to the SWIFT payment system is also being discussed to facilitate the export of agricultural goods.

Russia has been demanding the reconnection of the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT international payments system. European Union disconnected the bank from SWIFT in June 2022 after Russia's invasion. UN Secretary-General, Antonio Guterres, has proposed extending the Black Sea grain deal for several months and is urging Russian President Vladimir Putin to agree to the extension. In exchange, the EU would reconnect a subsidiary of Rosselkhozbank to SWIFT for grain and fertilizer transactions. However, the bank would only be reconnected to make payments under the grain deal.