The U.N. chief expressed concern about Russia not renewing the Black Sea Grain Initiative on July 17.

Threats to Walk Away from the Deal

Moscow has been threatening to walk away from the deal known as the Black Sea Grain Initiative – brokered by the United Nations and Türkiye in July last year – if obstacles to its own grain and fertilizer shipments are not removed.

\”I am concerned, and we are working hard in order to make sure that it will be possible to maintain the Black Sea initiative and at the same time that we are able to proceed with our work to facilitate Russian exports,\” Secretary-General Antonio Guterres told reporters on Monday.

Memorandum of Understanding

To convince Russia to agree to the Black Sea grain deal, a three-year memorandum of understanding was struck at the same time under which U.N. officials agreed to help Russia with its own food and fertilizer exports.

Russian Demands

While Russian exports of food and fertilizer are not subject to Western sanctions imposed after the February 2022 invasion of Ukraine, Moscow says restrictions on payments, logistics and insurance have amounted to a barrier to shipments.

Deputy Foreign Minister Sergei Vershinin said on Saturday that Russia \”cannot be satisfied with how this memorandum is being implemented,\” the TASS news agency reported. He was speaking after meeting the top U.N. trade official Rebeca Grynspan in Geneva on Friday.

Among the demands put forward by Russia are the resumption of its ammonia exports via a pipeline to Ukraine’s port of Pivdennyi, and the reconnection of the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT international payment system.

Impact on International Markets

The United Nations has helped boost Russian exports of food and fertilizers, facilitating a steady flow of ships to its ports and lower freight and insurance rates, a U.N. spokesperson said on Friday.

U.N. officials and analysts warned that a failure to extend the Black Sea Grain Initiative could hurt countries in Africa, the Middle East and parts of Asia that rely on Ukrainian wheat, barley, vegetable oil and other affordable food products, especially as drought takes a toll. The deal helped lower prices of food commodities like wheat over the last year, but that relief has not been reflected on kitchen tables.

Ukraine can send its food by land through Europe so that it wouldn’t be completely cut off from world markets, but those routes have a lower capacity than sea shipments and have stirred disunity in the European Union.